<PAGE>
As filed with the Securities and Exchange Commission on March 19, 1999.
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
RITE AID CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 5912 23-1614034
(State or other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification No.)
Incorporation or Classification Code
Organization) Number)
----------------
Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
(717) 761-2633
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
----------------
Elliot S. Gerson
Executive Vice President, General Counsel and Secretary
Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
(717) 761-2633
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
With a Copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
(212) 309-6000
Attn: Howard A. Kenny
----------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
----------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
Title of Each Class
of Proposed Maximum Proposed Maximum
Securities to Be Amount to be Offering Price Aggregate Amount of
Registered Registered Per Unit(1) Offering Price Registration Fee(2)
- --------------------------------------------------------------------------------
5 1/2% Notes Due 2000 $200,000,000 100% $200,000,000 $ 55,600
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6% Notes Due 2005 $200,000,000 100% $200,000,000 $ 55,600
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6 1/8% Notes Due 2008 $150,000,000 100% $150,000,000 $ 41,700
- --------------------------------------------------------------------------------
6 7/8% Debentures Due
2028 $150,000,000 100% $150,000,000 $ 41,700
- --------------------------------------------------------------------------------
Total $194,600
</TABLE>
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(1) Determined solely for the purpose of calculating the registration fee
in accordance with Rule 457 under the Securities Act.
(2) Calculated in accordance with Rule 457(f)(2) under the Securities Act.
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated March 19, 1999.
Prospectus
RITE AID CORPORATION
- --------------------------------------------------------------------------------
Rite Aid Corporation offers to exchange the "Exchange Securities" consisting
of up to $200,000,000 of its 5 1/2% Notes due December 15, 2000 (the "2000
Notes"), $200,000,000 of its 6% Notes due December 15, 2005 (the "2005 Notes"),
$150,000,000 of its 6 1/8% Notes due December 15, 2008 (the "2008 Notes") and
$150,000,000 of its 6 7/8% Debentures due December 15, 2028 (the "Debentures"
and, together with the 2000 Notes, the 2005 Notes and the 2008 Notes, the
"Securities") for an identical principal amount of its outstanding Securities
(the "Restricted Securities").
The Exchange Securities will:
. have the same terms as the Restricted Securities, except the Exchange
Securities will be registered with the Securities and Exchange Commission
and you will be able to offer and sell them fully to any potential buyer.
This is beneficial to you because the Restricted Securities are not
registered and may not be offered or sold unless they are registered and
exempted from registration under federal securities laws.
. bear interest at the interest rates indicated above until the maturity
dates indicated above accruing from December 21, 1998 (the issue date of
the Restricted Securities) and provide for payment semi-annually on June 15
and December 15, beginning June 15, 1999.
. not trade on any securities exchange or through any automated quotation
system. No active public market is anticipated.
The exchange offer:
. expires at 5:00 p.m., New York City time, on , 1999, unless
extended.
. is subject to customary terms and conditions, as specified in this
prospectus and the accompanying letter of transmittal.
The 2005 Notes, the 2008 Notes and the Debentures will be redeemable at our
option, in whole or in part from time to time.
We issued the Restricted Securities in a transaction not requiring
registration under the Securities Act and thus their transfer is restricted. We
are making the exchange offer to satisfy your registration rights, as holders
of the Restricted Securities, requiring us to either provide you with Exchange
Securities registered under the Securities Act or to register your Restricted
Securities for resale. In the event we do not fulfill these obligations, we
must make certain penalty interest payments to you, as described under
"Exchange Offer--Purpose of the Exchange Offer."
You should rely only on the information contained in this prospectus or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. We are not offering to sell or asking you to buy
anything other than the Exchange Securities. We are not offering to sell or
asking you to buy anything in any jurisdiction where doing so would be against
the law.
Neither the Securities and Exchange Commission nor any state securities
commission has approved the Exchange Securities nor determined that this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offence.
, 1999
<PAGE>
THE COMPANY
Rite Aid Corporation, incorporated in 1968, is one of the largest retail
drugstore chains in the United States. As of February 27, 1999, we operated
3,821 drugstores, which range in size from approximately 7,200 to 20,000 square
feet, in 30 eastern, southern and western states and the District of Columbia.
We employ over 75,000 associates.
Pharmacy service forms the core of our business, with prescriptions
accounting for 54.2 percent of sales in the fiscal year ended February 27,
1999. Our drugstores offer a full selection of health and personal care
products, seasonal merchandise and a large private label product line in
convenient locations, and a customer-oriented shopping environment. Currently,
we now have over 1,000 stores with drive-through pharmacy windows, over 260
stores that are open 24 hours per day, and over 1,900 stores with one-hour
photo departments. We have added express mail with complementary services and
one-hour photo departments to attract new customers and enhance customer
loyalty.
Through our Eagle Managed Care Corp. subsidiary and our recently purchased
subsidiary, PCS Health Systems, Inc., one of the largest pharmacy benefit
managers, we are engaged in pharmacy benefit management, marketing prescription
plans and selling other managed health care services to employers, health plans
and their members and government-sponsored employee benefit programs. We
purchased PCS, on January 22, 1999.
On January 7, 1999, we announced an alliance with General Nutrition
Companies, Inc., a leader in the fast-growing vitamin and nutritional
supplement category. Under the agreement, we will open and operate 1,500 GNC
stores-within-a-store in Rite Aid stores across the country. In addition, Rite
Aid and GNC will jointly market a new brand of vitamins and mineral
supplements; GNC will manufacture certain of Rite Aid's private label vitamins
and supplements; and Rite Aid and GNC will jointly operate a co-branded web-
site that will feature nutritional information and market their vitamins and
minerals.
On December 12, 1996, we acquired Thrifty PayLess Holdings, Inc., which was
one of the largest drugstore retailers in the western United States with over
1,000 stores in 10 states. We have renamed the Thrifty PayLess stores "Rite
Aid" and are in the process of remodeling those stores. On August 27, 1997, we
completed the purchases of K&B Incorporated and Harco, Inc. K&B operated 186
stores in Louisiana, Alabama, Mississippi, Texas, Tennessee and Florida, and in
1996 was the 13th largest drugstore chain in the U.S. in terms of sales, with
sales of $580,000,000. Harco operated 146 stores in Alabama, Mississippi and
Florida, and in 1996 was the 17th largest drugstore chain in the U.S. in terms
of sales, with sales of $258,000,000. We have renamed all K&B and Harco stores
"Rite Aid" and have completed the conversion of the systems and processes of
those stores into our systems and processes.
We are a Delaware corporation. Our principal executive offices are located
at 30 Hunter Lane, Camp Hill, Pennsylvania 17011 and our telephone number is
(717) 761-2633.
2
<PAGE>
RECENT DEVELOPMENTS
On March 12, 1999, we announced that our preliminary estimate is that our
fully diluted earnings per share for the fourth quarter will be approximately
$0.30 to $0.32. We expect to announce our results for the fourth quarter and
the fiscal year on March 29, 1999.
We understand that, subsequent to our March 12 announcement, several
purported class action lawsuits were commenced against Rite Aid and Martin
Grass, our Chairman and Chief Executive Officer, on or about March 15, 1999, in
the United States District Court for the Eastern District of Pennsylvania. We
understand that the plaintiffs in these suits allege that we failed to make
prompt public disclosure of matters mentioned in our March 12 announcement that
affected our results for the fourth quarter. We understand that the plaintiffs
in these suits seek to recover damages on behalf of all purchasers of our
common stock between December 14, 1998 and March 11, 1999.
AVAILABLE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act, relating to the Exchange Securities. As permitted by SEC rules, this
prospectus omits certain information included in the registration statement.
For a more complete understanding of the exchange offer, you should refer to
the registration statement, including its exhibits.
We also file annual, quarterly and special reports, proxy statements and
other information with the SEC. You can read and copy the registration
statement and any other document we file at the SEC's public reference room at
450 Fifth Street, N.W., Washington, D.C. 20549. These documents are also
available at the public reference rooms at the SEC's regional offices in New
York, New York and Chicago, Illinois. You may call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web site at http://www.sec.gov. Documents
filed by us with the SEC are identifiable by our commission file number, 1-
5742.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose information to you by referring you to
those documents. These incorporated documents contain business and financial
information about us that is not included in or delivered with this prospectus.
The information incorporated by reference is part of this prospectus, and later
information filed with the SEC will update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior
to the date the exchange offer expires:
. Annual Report on Form 10-K for the year ended February 28, 1998;
. Quarterly Reports on Form 10-Q for the quarters ended May 30, 1998,
August 29, 1998 and November 28, 1998 and
. Current Reports on Form 8-K dated November 17, 1998, January 19, 1999,
February 9, 1999 and March 17, 1999.
We will provide without charge to each person to whom a copy of this
prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated into this prospectus by reference. We will also provide
copies of any exhibits to such documents that are specifically incorporated by
reference in such documents. Requests for such copies should be directed to
Investor Relations, Rite Aid Corporation, 30 Hunter Lane, Camp Hill,
Pennsylvania 17011, telephone number (717) 761-2633, Ext. 5362.
USE OF PROCEEDS
We will receive no proceeds from the exchange of Securities pursuant to the
exchange offer.
3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
We have calculated the ratios of earnings to fixed charges in the following
table by dividing earnings by fixed charges. For this purpose, earnings include
pre-tax income from continuing operations plus fixed charges. Fixed charges
include interest, whether expensed or capitalized, amortization of debt expense
and that portion of rental expense which is representative of the interest
factor in these rentals.
<TABLE>
<CAPTION>
Thirty-nine Fiscal Year
Weeks Ended ------------------------
November 28,
1998 1998 1997 1996 1995 1994
------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges....... 1.57 2.91 2.56 3.08 3.78 1.66
</TABLE>
EXCHANGE OFFER
Purpose of the Exchange Offer
We initially sold the Restricted Securities in a private offering on
December 21, 1998 to J.P. Morgan Securities Inc., Salomon Smith Barney Inc.,
Lehman Brothers Inc., NationsBanc Montgomery Securities LLC, ABN AMRO
Incorporated and First Chicago Capital Markets, Inc. pursuant to a purchase
agreement dated December 16, 1998 between us and them. These "initial
purchasers" of the Restricted Securities resold them to qualified institutional
buyers in reliance on, and subject to the restrictions imposed under, Rule 144A
under the Securities Act and outside the United States in accordance with the
provisions of Regulation S under the Securities Act.
In connection with the private offering of the Restricted Securities, we
entered into an exchange and registration rights agreement dated December 21,
1998, with the initial purchasers, in which we agreed, among other things:
. to file with the SEC on or before March 21, 1999, a registration
statement relating to an exchange offer for the Restricted Securities;
. to use our reasonable best efforts to cause such exchange offer
registration statement to be declared effective under the Securities Act
on or before June 19, 1999;
. upon the effectiveness of the registration statement, to offer the
holders of the Restricted Securities the opportunity to exchange their
Restricted Securities for a like principal amount of Exchange Securities;
. to keep the exchange offer open for not less than 30 days (or longer, if
required by applicable law) after notice of the exchange offer is mailed
to holders of Restricted Securities; and
. to use our reasonable best efforts to complete the exchange offer on or
before July 19, 1999.
We are making the exchange offer to satisfy your registration rights under
the exchange and registration rights agreement. If we fail to fulfill such
obligations, we must pay you, as a holder of outstanding Restricted Securities,
penalty interest at a rate of 0.50% per annum, determined daily.
We strongly encourage you to read the entire text of the exchange and
registration rights agreement, which is included as Exhibit 4.2 to the exchange
offer registration statement. We expressly qualify all discussion of the
exchange and registration rights agreement by the terms of the agreement
itself.
Effect of the Exchange Offer
Based on several no-action letters issued by the staff of the SEC to third
parties in unrelated transactions, we believe that you may offer for resale,
resell or otherwise transfer any Exchange Securities issued to you in
4
<PAGE>
the exchange offer without registration of your Exchange Securities or of a
prospectus, if
. you are acquiring the Exchange Securities in the ordinary course of your
business;
. you are not participating, do not intend to participate and have no
arrangement or understanding with any person to participate, in a
distribution of the Exchange Securities;
. you are not an affiliate of Rite Aid (as defined in Rule 405 under the
Securities Act); and
. you are not a broker-dealer who acquired Restricted Securities as a
result of market-making activities or other trading activities.
If you are an affiliate of Rite Aid or an initial purchaser or if you have
any arrangement or understanding with any person to participate in a
distribution of the Exchange Securities:
. you will not be able to rely on the interpretations of the staff of the
SEC in connection with any offer for resale, resale or other transfer of
Exchange Securities; and
. you must comply with the registration and prospectus delivery
requirements of the Securities Act, or have an exemption available to
you, in connection with any offer for resale, resale or other transfer of
the Exchange Securities.
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Restricted Securities it acquired as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of its Exchange Securities. This will
not be an admission by the broker-dealer that it is an underwriter within the
meaning of the Securities Act. See "Plan of Distribution."
Terms of the Exchange Offer
. We will accept all Restricted Securities validly tendered and not
withdrawn prior to 5:00 p.m., New York City time, on the expiration date
of the exchange offer. You should read "--Expiration Date; Extensions;
Amendments" below for an explanation of how the expiration date may be
amended.
. We will issue and deliver $1,000 principal amount of Exchange Securities
in exchange for each $1,000 principal amount of outstanding Restricted
Securities accepted in the exchange offer. Holders may exchange some or
all of their Restricted Securities in denominations of $1,000 and
integral multiples thereof.
. By tendering Restricted Securities in exchange for Exchange Securities
and by signing the letter of transmittal, you will be representing that,
among other things:
. any Exchange Securities to be received by you will be acquired in the
ordinary course of your business;
. you have no arrangement or understanding with any person to
participate in the distribution of the Exchange Securities; and
. you are not an affiliate (as defined in Rule 405 under the Securities
Act) of Rite Aid, or, if you are an affiliate, you will comply with
the registration and prospectus delivery requirements of the
Securities Act to the extent applicable.
5
<PAGE>
. We are sending this prospectus and the letter of transmittal to all
registered holders of Restricted Securities as of the close of business
on , 1999.
. We are not conditioning the exchange offer upon the tender of any minimum
amount of Restricted Securities.
. We have provided for customary conditions, which we may waive in our
discretion. See "--Conditions to the Exchange Offer."
. We may accept tendered Restricted Securities by giving oral or written
notice to the exchange agent. The exchange agent will act as your agent
for the purpose of receiving the Exchange Securities from us and
delivering them to you.
. You will not be required to pay brokerage commissions or fees or, subject
to the instructions in the letter of transmittal, transfer taxes with
respect to the exchange of Restricted Securities We will pay all charges
and expenses in connection with the exchange offer other than taxes
specified under "--Fees and Expenses."
Expiration Date; Extensions; Amendments
The exchange offer will expire at 5:00 p.m., New York City time, on ,
1999, unless we, in our sole discretion, extend it. We may extend the exchange
offer at any time and from time to time by giving oral or written notice to the
exchange agent and by timely public announcement. We may also accept all
properly tendered Restricted Securities as of the expiration date and extend
the expiration date in respect of the remaining outstanding Restricted
Securities.
We may, in our sole discretion,
. amend the terms of the exchange offer in any manner;
. delay acceptance of, or refuse to accept, any Restricted Securities
not previously accepted;
. extend the exchange offer; or
. terminate the exchange offer.
We will give prompt notice of any amendment to the registered holders of the
Restricted Securities. If we materially amend the exchange offer, we will
promptly disclose the amendment in a manner reasonably calculated to inform you
of the amendment and we will extend the exchange offer to the extent required
by law.
Procedures for Tendering
Only a holder of Restricted Securities may tender them in the exchange
offer. To tender in the exchange offer, you must:
. complete, sign and date the letter of transmittal or a facsimile of
it;
. have the signatures thereon guaranteed if required by the letter of
transmittal; and
. mail or deliver the letter of transmittal or facsimile thereof and
any other required documents, to the exchange agent before 5:00 p.m.,
New York City time, on the expiration date.
Prior to the expiration date, the exchange agent must receive a timely
confirmation of a book-entry transfer of tendered Restricted Securities into
its account at the Depository Trust Company ("DTC") pursuant to the procedures
for book-entry transfer as provided for herein and in the letter of
transmittal, or the holder must comply with the guaranteed delivery procedures
described below under "--Guaranteed Delivery Procedures."
6
<PAGE>
Any financial institution that is a participant in DTC's system may make
book-entry delivery of the Restricted Securities by causing DTC to transfer the
Restricted Securities into the exchange agent's account in accordance with
DTC's procedures. Although book-entry transfer into the exchange agent's
account at DTC will effect delivery of Restricted Securities, you must deliver
the letter of transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, to the exchange agent at its
address set forth under "--Exchange Agent" before 5:00 p.m., New York City
time, on the expiration date.
Delivery of documents to DTC in accordance with DTC's procedures does NOT
constitute delivery to the exchange agent.
The tender by a holder of Restricted Securities will constitute an agreement
between such holder, Rite Aid and the exchange agent in accordance with the
terms and subject to the conditions specified in this prospectus and in the
letter of transmittal. If a holder tenders less than all the Restricted
Securities held, the holder should fill in the amount of Restricted Securities
being tendered in the appropriate box on the letter of transmittal. The
exchange agent will deem the entire amount of Restricted Securities delivered
to it to have been tendered unless the holder has indicated otherwise.
The method of delivery of the letter of transmittal and all other required
documents to the exchange agent is at your election and risk. Instead of
delivery by mail, we recommend that you use an overnight or hand delivery
service. In all cases, you should allow sufficient time to ensure delivery to
the exchange agent prior to the expiration date. Do not send your letter of
transmittal or other required documents to us.
Signature Requirements and Signature Guarantee
You must arrange for an "eligible institution" to guarantee the signatures
on a letter of transmittal or a notice of withdrawal. The following are
"eligible institutions":
. a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
. a commercial bank or trust company having an office or correspondent in
the United States or
. an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act.
A signature guarantee is not required with respect to Restricted Securities
tendered for the account of an eligible institution.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, sign or endorse any required documents, they should so indicate when
signing, and unless waived by us, submit evidence satisfactory to us of their
authority to so act with the letter of transmittal.
Conditions of the Exchange Offer
We will determine all questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of the tendered
Restricted Securities in our sole discretion. Our determination will be final
and binding. We may reject any and all Restricted Securities which are not
properly tendered or any Restricted Securities of which our acceptance would,
in the opinion of our counsel, be unlawful. We also may waive any
irregularities or conditions of tender as to particular Restricted Securities.
Our interpretation of the terms and conditions of the exchange offer (including
the instructions in the letter of transmittal) will be final and binding on all
parties. Unless waived, you must cure any defects or irregularities in
connection with tenders of Restricted Securities within such time as we shall
determine.
7
<PAGE>
Although we intend to notify tendering holders of defects or irregularities
with respect to tenders of Restricted Securities, neither we nor anyone else
has any duty to do so. Neither we nor anyone else shall incur any liability for
failure to give such notification. Your Restricted Securities will not be
deemed tendered until you have cured or we have waived any irregularities. As
soon as practicable following the expiration date the exchange agent will
return any Restricted Securities that we reject due to improper tender or
otherwise unless you cured all defects or irregularities or we waive them.
We reserve the right in our sole discretion:
. to purchase or make offers for any Restricted Securities that remain
outstanding subsequent to the expiration date;
. to terminate the exchange offer, as set forth in "--Conditions to the
Exchange Offer"; and
. to the extent permitted by applicable law, to purchase Restricted
Securities in the open market, in privately negotiated transactions or
otherwise.
The terms of any such purchases or offers may differ from the terms of the
exchange offer.
We will not be required to accept for exchange, or to issue Exchange
Securities for, any Restricted Securities, and we may terminate or amend the
exchange offer before the acceptance of Restricted Securities if, in our
judgment, any of the following conditions has occurred or exists or has not
been satisfied:
. the exchange offer, or the making of any exchange by a holder of
Restricted Securities, violates applicable interpretations of the SEC
staff;
. any person shall have initiated or threatened an action or proceeding in
any court or by or before any governmental agency or body with respect to
the exchange offer; or
. any legislative or regulatory body shall have adopted or enacted any law,
statute, rule or regulation that can reasonably be expected to impair our
ability to proceed with the exchange offer.
If we determine that we may terminate the exchange offer for any of these
reasons, we may:
. refuse to accept any Restricted Securities and return any Restricted
Securities that have been tendered to the tendering holders,
. extend the exchange offer and retain all Restricted Securities tendered
prior to the expiration date of the exchange offer, subject to the rights
of the holders of the tendered Restricted Securities to withdraw such
Restricted Securities, or
. waive such termination event with respect to the exchange offer and
accept the properly tendered Restricted Securities that have not been
withdrawn.
If we determine that such waiver constitutes a material change in the exchange
offer, we will promptly disclose such change in a manner reasonably calculated
to inform the holders of such change and we will extend the exchange offer to
the extent required by law.
We may assert or waive any of these conditions in our complete discretion.
Book-Entry Transfer
The exchange agent will make a request promptly after the date of this
prospectus to establish accounts with respect to the Restricted Securities.
Subject to the establishment of these accounts, any financial institution that
is a participant in DTC's system may make book-entry delivery of Restricted
Securities by causing DTC to transfer them into the exchange agent's account
with respect to the Restricted Securities. Each institution must do this in
accordance with DTC's Automated Tender Offer Program procedures for such
transfer. However, the exchange agent will only exchange the Restricted
Securities so tendered after a timely confirmation of their book-entry transfer
into the exchange agent's account, and timely receipt of an Agent's Message and
any other documents required by the letter of transmittal.
8
<PAGE>
The term "Agent's Message" means a message, transmitted by DTC and received
by the exchange agent and forming part of the confirmation of a book-entry
transfer, which states that
. DTC has received an express acknowledgment from a participant tendering
Restricted Securities the participant has received the letter of
transmittal and agrees to be bound by its terms, and
. Rite Aid may enforce such agreement against the participant.
Although you may effect delivery of Restricted Securities through DTC into
the exchange agent's account at DTC, you must provide the exchange agent a
completed and executed letter of transmittal with any required signature
guarantee and all other required documents prior to the expiration date. If you
comply with the guaranteed delivery procedures described below, you must
provide the letter of transmittal to the exchange agent within the time period
provided. Delivery of documents to DTC without confirmation or compliance does
not constitute delivery to the exchange agent.
Guaranteed Delivery Procedures
If you wish to tender your Restricted Securities and (1) cannot deliver the
letter of transmittal or any other required documents to the exchange agent
prior to the expiration date or (2) cannot complete the procedure for book-
entry transfer on a timely basis, you may instead effect a tender if:
. you make the tender through an eligible institution;
. prior to the expiration date, the exchange agent receives from such
eligible institution (1) a properly completed and duly executed letter of
transmittal (or a facsimile thereof) and (2) notice of guaranteed
delivery (by facsimile transmittal, mail or hand delivery) specifying the
name and address of the holder and the principal amount of such
Restricted Securities tendered, stating that the tender is being made,
and guaranteeing that, within three New York Stock Exchange trading days
after the date of execution of the notice of guaranteed delivery, a
confirmation of a book-entry transfer into the exchange agent's account
at DTC and any other documents required by the letter of transmittal,
will be deposited by the eligible institution with the exchange agent;
and
. the exchange agent receives such confirmation of a book-entry transfer
into its account at DTC and all other documents required by the letter of
transmittal within three New York Stock Exchange trading days after the
date of execution of the notice of guaranteed delivery.
The exchange agent will provide you a form of notice of guaranteed delivery
upon request.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw tendered
Restricted Securities at any time before 5:00 p.m., New York City time, on the
expiration date.
To do so, you must provide the exchange agent with a written or facsimile
transmission notice of withdrawal before 5:00 p.m., New York City time, on the
expiration date.
Any notice of withdrawal must
. identify the Restricted Securities to be withdrawn (including the
principal amount of the Restricted Securities and the name and number of
the account at DTC to be credited); and
. be signed by you in the same manner as the original signature on your
letter of transmittal (including any required signature guarantee) or be
accompanied by documents of transfer sufficient to permit the registrar
to register the transfer of the withdrawn Restricted Securities into your
name.
We will determine all questions as to the validity, form and eligibility
(including time of receipt) of all withdrawal notices. Our determination shall
be final and binding on all parties. We will not deem any Restricted Securities
so withdrawn to be validly tendered for purposes of the exchange offer and will
not issue Exchange Securities with respect to them unless the holder of the
Restricted Securities so withdrawn validly retenders them. You may retender
withdrawn Restricted Securities by following one of the procedures described
above under "--Procedures for Tendering" at any time prior to the expiration
date.
9
<PAGE>
Exchange Agent
We have appointed Harris Trust and Savings Bank, which also acts as the
trustee under the indenture, as exchange agent for the exchange offer. In this
capacity, the exchange agent has no fiduciary duties and will be acting solely
on the basis of our directions. You should direct all communications with the
exchange agent, including requests for assistance or for additional copies of
this prospectus or of the letter of transmittal as follows:
Facsimile Transmission By Hand/Overnight By Registered or
Number: Delivery: Certified Mail:
Harris Trust and Savings Harris Trust and Savings
Bank Bank
(For Eligible c/o Harris Trust Company c/o Harris Trust Company
Institutions Only) of New York of New York
(212) 701-7636 88 Pine Street P.O. Box 1010
19th Floor Wall Street Station
New York, NY 10005 New York, NY 10268-1010
For General Information and to Confirm Receipt of Facsimile by Telephone:
(212) 701-7624
Delivery to an address or facsimile number other than those listed above
will not constitute a valid delivery.
Fees and Expenses
We will bear all expenses of the exchange offer. We are making the principal
solicitation pursuant to the exchange offer by mail. Our officers and regular
employees and our affiliates may also make solicitations in person, by
telegraph, telephone or facsimile transmission.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or other persons
soliciting acceptances of the exchange offer. We will, however, pay the
exchange agent reasonable and customary fees for its services and will
reimburse its reasonable out-of-pocket costs and expenses and will indemnify
the exchange agent for all losses and claims incurred by it as a result of the
exchange offer. We may also pay brokerage houses and other custodians, nominees
and fiduciaries the reasonable out-of-pocket expenses incurred by them in
forwarding copies of this prospectus, letters of transmittal and related
documents to the beneficial owners of the Restricted Securities and in handling
or forwarding tenders for exchange.
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<PAGE>
Transfer Taxes
We will pay any transfer taxes applicable to the exchange of Restricted
Securities pursuant to the exchange offer. If, however, a transfer tax is
imposed for any reason other than the exchange of Restricted Securities
pursuant to the exchange offer, then the amount of any these transfer taxes
(whether imposed on the registered holder thereof or any other person) will be
payable by the tendering holder. For example, the tendering holder will pay
transfer taxes, if:
. Exchange Securities for principal amounts not tendered, or accepted for
exchange are to be registered or issued in the name of any person other
than the registered holder of the Restricted Securities tendered; or
. tendered Restricted Securities are registered in the name of any person
other than the person signing the letter of transmittal.
If you do not submit satisfactory evidence of payment of taxes for which you
are liable or exemption from them with your letter of transmittal, we will bill
you for the amount of these transfer taxes directly.
Accounting Treatment
We will record the Exchange Securities at the same carrying value as the
Restricted Securities, which is the principal amount as reflected in our
accounting records on the date of the exchange. Accordingly, we will not
recognize any gain or loss for accounting purposes. We will capitalize the
expenses of the exchange offer for accounting purposes. We will classify these
expenses as prepaid expenses and include them in other assets on our balance
sheet. We will amortize these expenses over the period until
. December 15, 2000 with respect to the 2000 Notes;
. December 15, 2005 with respect to the 2005 Notes;
. December 15, 2008 with respect to the 2008 Notes and
. December 15, 2028 with respect to the 2028 Notes.
Consequences of a Failure to Exchange Restricted Securities
Holders of Restricted Securities who do not tender their Restricted
Securities in the exchange offer will continue to hold such Restricted
Securities and will be entitled to all the rights, under the indenture. By
making the exchange offer, we will satisfy our obligation to provide you with
Exchange Securities and register your Restricted Securities for resale.
All untendered Restricted Securities will continue to be subject to the
restrictions on transfer set forth in the indenture. Accordingly, after the
completion of the exchange offer, you will only be able to offer for sale, sell
or otherwise transfer untendered Restricted Securities as follows:
. to us;
. pursuant to a registration statement that has been declared effective
under the Securities Act;
. for so long as the Restricted Securities are eligible for resale pursuant
to Rule 144A under the Securities Act, to a person you reasonably believe
is a qualified institutional buyer within the meaning of Rule 144A, that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the transfer is being
made in reliance on the exemption from the registration requirements of
the Securities Act provided by Rule 144A;
. pursuant to offers and sales that occur outside the United States to
foreign persons in transactions complying with the provisions of
Regulation S under the Securities Act; or
. pursuant to any other available exemption from the registration
requirements of the Securities Act.
The tender and acceptance in the exchange offer of Restricted Securities
could adversely affect the liquidity of the trading market for any untendered
Restricted Securities.
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<PAGE>
DESCRIPTION OF THE SECURITIES
The form and terms of the Exchange Securities are the same as the form and
terms of the Restricted Securities except that the Exchange Securities will
have been registered under the Securities Act and thus will not bear legends
restricting their transfer pursuant to the Securities Act. The Restricted
Securities have been, and the Exchange Securities are to be, issued under an
indenture, dated as of December 21, 1998, between Rite Aid and Harris Trust and
Savings Bank, as trustee.
<TABLE>
<CAPTION>
2000 Notes 2005 Notes 2008 Notes 2028 Debentures
- ------------------------- ------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Principal $200,000,000 Principal $200,000,000 Principal $150,000,000 Principal $150,000,000
amount being amount being amount being amount being
offered offered offered offered
Maturity December 15, Maturity December 15, Maturity December 15, Maturity December 15,
Date: 2000 Date: 2005 Date: 2008 Date: 2028
Interest 5 1/2% Interest 6% Interest 6 1/8% Interest 6 7/8%
Rate: Rate: Rate: Rate:
Interest June 15 and Interest June 15 and Interest June 15 and Interest June 15 and
payment December 15 payment December 15 payment December 15 payment December 15
dates: dates: dates: dates:
</TABLE>
The Securities are limited to $700,000,000 in aggregate principal amount.
The Restricted Securities are, and the Exchange Securities will be, unsecured
obligations of Rite Aid and will rank equally with all our other unsecured and
unsubordinated obligations. We will issue the Exchange Securities only in fully
registered form, without coupons, in denominations of $1,000 or any integral
multiple thereof.
Each of the Exchange Securities will bear interest from the last payment
dated on which interest was paid on the Restricted Securities surrendered in
exchange therefor. If we have paid no interest on the Restricted Securities,
the Exchange Securities will bear interest from December 21, 1998. We will pay
interest to the persons in whose name the Exchange Securities are registered on
the applicable record date, which is the fifteenth calendar day immediately
preceding the related Interest Payment Date.
We will issue the Exchange Securities in the form of one or more registered
global securities. These will be deposited with, or on behalf of, DTC and
registered in the name of DTC or its nominee. See "--Book-Entry System."
We have the right to redeem the Securities
We may redeem the 2005 Notes, the 2008 Notes and the Debentures at our
option, in whole at any time or in part from time to time, at a redemption
price equal to the greater of
. 100% of the principal amount of the Securities to be redeemed or
. the sum of the present values of the remaining scheduled payments of
principal and interest thereon (from the redemption date to the stated
maturity date of such Securities) discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate (as defined below) plus 20 basis points (in
the case of the 2005 Notes or 2008 Notes) or 25 basis points (in the case
of the Debentures),
. plus, in each case, accrued and unpaid interest thereon to (but
excluding) the redemption date.
We will mail notice of any redemption at least 30 days, but not more than 90
days, before the redemption date to each holder of the Securities to be
redeemed. Unless we default in payment of the redemption price, on and after
the redemption date, interest will cease to accrue on the Securities or
portions thereof called in connection with such redemption.
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<PAGE>
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining life that would be utilized, at the time of selection and in
accordance with customary practice, in pricing new issues of corporate debt
securities of comparable maturity with the remaining life of the Securities to
be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of five Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or if the Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means each of J.P. Morgan Securities Inc.,
Salomon Smith Barney Inc., Lehman Brothers Inc., NationsBanc Montgomery
Securities LLC, ABN AMRO Incorporated and First Chicago Capital Markets, Inc.,
and their respective successors; provided, however, that if any of the
foregoing shall cease to be primary U.S. Government securities dealers in New
York City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer by 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual yield to maturity of the Comparable Treasury
Issue, calculated on the third Business Day preceding such redemption date
using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such
redemption date.
Covenants Applicable to Securities
The indenture does not prohibit us from entering into transactions that may
adversely affect you
The indenture does not contain any provisions that permit you to require
prepayment in the event of a change in the management or control of Rite Aid.
It does not afford you protection in the event of a highly leveraged
transaction, reorganization, restructuring, merger or similar transaction
involving Rite Aid that may adversely affect you (except to the limited extent
that the covenants described below might affect our ability to consummate such
transactions).
The various restrictive provisions of the indenture apply to Rite Aid and to
what the indenture defines as our "Restricted Subsidiaries" but do not apply to
what the indenture defines as our "Unrestricted Subsidiaries". In this section,
we use the terms "we" and "us" to mean Rite Aid and our Restricted
Subsidiaries.
"Unrestricted Subsidiaries" are those Subsidiaries which are designated as
such by our Board of Directors from time to time pursuant to the indenture (in
each case, unless and until designated as Restricted Subsidiaries by the Board
of Directors pursuant to the Indenture).
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<PAGE>
"Restricted Subsidiaries" are all Subsidiaries other than Unrestricted
Subsidiaries.
A "Wholly-owned Restricted Subsidiary" is a Restricted Subsidiary at least
99% of the outstanding voting stock of which (except directors' qualifying
shares) is owned by us.
A "Subsidiary" is a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by us or an entity other than
a corporation of which we have, directly or indirectly, the majority ownership
and the power to direct the management. (Section 1.01)
We may not designate an Unrestricted Subsidiary a Restricted Subsidiary if
it has any debt we would not be permitted to incur under the terms of the
indenture, immediately after such Unrestricted Subsidiary becomes a Restricted
Subsidiary. (Section 10.11(a))
The indenture limits our right to incur Secured Debt
We may not incur or guarantee indebtedness secured by any lien, mortgage,
pledge or other encumbrance on our property without equally and ratably
securing the securities. This restriction does not apply to permitted
encumbrances described in the indenture, including:
. purchase money mortgage encumbrances existing on property at the time we
acquire it,
. conditional sales and similar agreements,
. the extension, renewal or refunding of any of the foregoing, and
. any Secured Debt of a Restricted Subsidiary owing to Rite Aid or a
Wholly-owned Restricted Subsidiary.
. other indebtedness secured by encumbrances not otherwise specifically
permitted which, together with Attributable Debt respecting existing
Sale and Leaseback Transactions (excluding Sale and Leaseback
Transactions entered into in respect of property we acquired not more
than 24 months prior to the date such transaction is entered into), and
unsecured Funded Debt of Restricted Subsidiaries (excluding unsecured
Funded Debt incurred through extension, refund or renewal where
Consolidated Funded Debt was not thereby increased and excluding any
Funded Debt owed to Rite Aid or a Wholly-owned Restricted Subsidiary),
incurred or entered into, as the case may be, after the date of the
Indenture, would not at the time exceed 20% of the Consolidated Net
Tangible Assets of Rite Aid and its Restricted Subsidiaries. (Section
10.10)
Under the Indenture (Section 1.01):
. "Consolidated Net Tangible Assets" means the total amount of assets on
our consolidated balance sheet (less applicable reserves and other
properly deductible items and after excluding any investments made in
Unrestricted Subsidiaries or in corporations while they were
Unrestricted Subsidiaries but which are not Subsidiaries at the time of
computation) after deducting (a) all liabilities and liability items,
including amounts in respect of obligations under leases (or guarantees
thereof) which under generally accepted accounting principles would be
included on such balance sheet, except Funded Debt, capital stock and
surplus, surplus reserves and provisions for deferred income taxes and
(b) goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles;
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<PAGE>
. "Funded Debt" means any indebtedness for money borrowed, created,
issued, incurred, assumed or guaranteed, whether secured or unsecured,
maturing more than one year after the date of determination thereof and
any indebtedness, regardless of its term, renewable pursuant to the terms
thereof or of a revolving credit or similar agreement effective for more
than one year after the date of the creation of the indebtedness, which
would, in accordance with generally accepted accounting practice, be
classified as funded debt, excluding (a) indebtedness for which money in
satisfaction thereof has been deposited in trust, (b) certain guarantees
arising in the ordinary course of business and (c) liabilities resulting
from capitalization of lease rentals;
. "Secured Debt" means indebtedness for money borrowed which is secured by
a lien or other encumbrance on our property, excluding certain guarantees
arising in the ordinary course of business; and
. "Attributable Debt" means as to any Sale and Leaseback Transaction (as
defined below), in the case of a capital lease, the amount of the capital
lease obligation thereunder and in all other cases, the present value of
the minimum remaining rental obligation discounted at the interest factor
included in the rental payment.
The indenture limits our right to make sales with leases back
We may not sell or transfer (except to Rite Aid or one or more Wholly-owned
Restricted Subsidiaries) any manufacturing plant, warehouse, retail store or
equipment owned and operated by us on or after the date of the indenture with
the intention that we take back a lease thereof, except a lease for a period,
including renewals, of not more than 24 months by the end of which period it is
intended that the use of such property by the lessee will be discontinued (any
such transaction, a "Sale and Leaseback Transaction"), except:
. where we would be entitled under Section 10.10(d) of the indenture to
incur additional secured indebtedness not otherwise specifically permitted
by the Indenture in an amount equal to the Attributable Debt respecting
such Sale and Leaseback Transaction,
. where the Sale and Leaseback Transaction is entered into in respect of
property acquired by us within 24 months of such acquisitions or
. where, within 120 days of entering into the Sale and Leaseback
Transaction, we apply to the retirement of its Secured Debt an amount
equal to the greater of:
. the net proceeds of the sale of the property leased pursuant to such
transaction or
. the fair market value of the property so leased.
The indenture limits the right of Restricted Subsidiaries to include Funded
Debt
The indenture prohibits our Restricted Subsidiaries from becoming liable for
any unsecured Funded Debt except where we would be entitled under Section
10.10(d) of the indenture to incur additional secured indebtedness not
otherwise specifically permitted by the indenture in an amount equal to such
Funded Debt and except for certain extensions, refundings and renewals of
Funded Debt and Funded Debt owing to Rite Aid or a Wholly-owned Restricted
Subsidiary. (Section 10.08)
The indenture limits our rights to merge or sell our assets
We may not merge with, or sell our property substantially as an entirety to
any other corporation if, as a result, our properties or assets would become
subject to a mortgage, lien or other encumbrance which would not be permitted
by the indenture, unless the Securities are equally and ratably secured with
such obligations. Any successor entity must be a corporation organized in the
United States and assume the payment of the
15
<PAGE>
principal and interest on the Securities and the performance of every covenant
under the indenture. Immediately after giving effect to a merger or a
consolidation, no event of default, and no event which, after notice or lapse
of time or both, would become an event of default, shall have happened and be
continuing. (Section 8.01)
Although the amount of our property that will constitute a sale of such
property "substantially as an entirety" is not readily quantifiable, a
determination as to whether such a sale has occurred will depend on the
percentage of operating and total assets transferred, among other measurements,
and other facts and circumstances of the transaction. In any particular
transaction, the determination of whether such a sale has occurred will be made
by us, and we will give notice of such occurrence to the holders of the
securities. Because of the uncertainty regarding whether a particular sale will
constitute a sale of property "substantially as an entirety," holders will not
be able to determine for themselves whether such a transaction has occurred and
will have to rely on our determination. If such a transaction occurs, the
person to whom such amount of our property is transferred shall enter into a
supplemental indenture satisfactory in form to the trustee.
Your consent is required for modification of the indenture
We can generally only modify the indenture and the rights of the holders
with the consent of the holders of not less than a majority in aggregate
principal amount of the outstanding securities. However, no modification
altering the terms of payment of principal or interest, changing the place or
medium of payment of principal or interest, impairing the rights of holders to
institute suit for payment or reducing the percentage required for modification
will be effective against any holder without his, her or its consent. (Section
9.02)
Events of Default
Each of the following is an event of default under the indenture:
. any default in any payment of principal of (or premium, if, any) upon any
securities when due;
. any default for 30 days in any payment of interest upon any securities
when due;
. any default in the performance of the covenant restricting merger and
sale of assets;
. any default for 60 days after appropriate notice in the performance of
any other covenant in the indenture;
. certain events of default resulting in the acceleration of the maturity
of indebtedness aggregating in excess of $10,000,000 under any mortgages,
indentures or instruments under which we may have issued, or by which
there may have been secured or evidenced, any other of our indebtedness;
or
. certain events in bankruptcy, insolvency or reorganization.
If an event of default shall occur and be continuing, the trustee or the
holders of not less than 25% in aggregate principal amount of the securities
then outstanding may declare the principal of the securities and the accrued
interest thereon, if any, to be due and payable.
The holders of a majority in aggregate principal amount of the securities
then outstanding may waive any event of default with respect to the securities
which has been cured. (Sections 5.01, 5.02 and 5.13)
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<PAGE>
We will file annually with the trustee a written statement signed by an
officer as to the absence of certain defaults under the terms of the indenture.
The indenture provides that the trustee may withhold notice to the holders of
any default (except in payment of principal or premium, if any, or interest) if
it considers it in the interest of the holders to do so. (Sections 6.02 and
10.13)
Subject to the provisions of the indenture relating to the duties of the
trustee, if an event of default shall occur and be continuing, the indenture
provides that the trustee shall be under no obligation to exercise any of its
rights or powers under the indenture at the request, order or direction of
holders unless such holders shall have offered to the trustee reasonable
indemnity. Subject to such provisions for indemnification and certain other
rights of the trustee, the indenture provides that the holders of a majority in
principal amount of the securities then outstanding shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee. (Sections 5.12 and 6.03)
We may discharge our obligations under the indenture
The indenture provides us with the option to discharge any and all
obligations (except for certain obligations to register the transfer or
exchange of securities, to replace stolen, lost or mutilated securities, to
maintain paying agencies and hold moneys for payment in trust) by depositing
with the trustee, in trust, money or U.S. government obligations, or both,
which through the payment of interest and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay any installment
of principal (and premium, if any) and interest on such securities in
accordance with the terms of the indenture and such securities. We may only
exercise this option:
. if we have received from, or there has been published by, the United
States IRS a ruling to the effect that such a discharge will not be
deemed, or result in, a taxable event with respect to holders of
securities,
. there is no event of default or event which may become an event of
default then occurring and
. such action would not cause any outstanding securities to become delisted
as a result thereof. (Article 12)
The indenture also provides us with the option to have the occurrence of
events described in the fifth bullet point under the heading "--Events of
Default" above no longer be events of default and to omit to comply with
certain of the covenants described under the heading "--Covenants Applicable to
Securities." above. In order to exercise such option:
. we must deposit with the trustee money or U.S. government obligations, or
both, which through the payment of interest and principal thereof in
accordance with their terms will provide money in an amount sufficient to
pay principal (and premium, if any) and interest on such securities in
accordance with the terms of the indenture and the securities.
. no event of default or event which may become an event of default may
have occurred and be continuing on the date of deposit with the trustee,
and
. we must deliver to the trustee an opinion of counsel to the effect that
the deposit and related option not to comply with certain covenants will
not cause the holders of the securities to recognize income, gain or loss
for federal income tax purposes. (Article 12)
If we exercise the defeasance option, payment of the securities may not be
accelerated
We may exercise the defeasance option notwithstanding our prior exercise of
the covenant defeasance option. If we exercise the defeasance option, payment
of the securities may not be accelerated because of an
17
<PAGE>
event of default. If we exercise the covenant defeasance option, payment of the
securities may not be accelerated by reference to the provisions described in
the preceding paragraph. In the event we omit to comply with our remaining
obligations with respect to such securities under the indenture after
exercising the covenant defeasance option and such securities are declared due
and payable because of the occurrence of any event of default, the amount of
money and U.S. government obligations on deposit with the trustee could be
insufficient to pay amounts due on the securities at the time of the
acceleration resulting from such event of default. However, we will remain
liable in respect of such payments. (Article 12)
Book-Entry System
We will issue the Exchange Securities in the form of one or more fully
registered global securities that we will deposit with, or on behalf of, DTC
and register in the name of DTC's nominee. See "--General."
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its "participants" deposit with DTC. DTC also facilitates
the settlement among participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes to participants' accounts, thereby eliminating the need for physical
movement of securities certificates. DTC participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. A number of these "direct participants" and the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. own DTC. Access to the DTC System is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly, including Euroclear and
Cedel Bank. The rules applicable to DTC and its participants are on file with
the SEC.
We will make payments of principal of, premium, if any, and interest on the
securities to Cede & Co., as nominee of DTC. DTC's practice is to credit direct
participants' accounts on the related payment date in accordance with their
respective holdings shown on DTC's records. DTC will credit payments of
interest on, premium, if any and principal of the securities held through
Euroclear or Cedel Bank to the cash accounts of their respective participants
in accordance with the relevant system's rules and procedures. Standing
instructions and customary practices will govern payments by participants to
beneficial owners of the securities, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name." These
payments will be the participant's responsibility and not DTC's, the trustee's
or any paying agent's under the indenture, or ours, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to Cede & Co. is our responsibility (or the trustee's or
any paying agent's). Disbursement of payments to direct participants is DTC's
responsibility, and disbursement of payments to the beneficial owners of the
securities is the responsibility of direct and indirect participants.
DTC may decide to discontinue providing its services as securities
depository with respect to the securities at any time by giving notice to us or
the trustee. Under such circumstances, in the event that a successor securities
depository is not obtained, securities certificates are required to be printed
and delivered.
None of Rite Aid, the trustee, any paying agent or any registrar for the
securities will have any responsibility or liability for any aspect of the
records maintained by DTC relating to, or payments made on account of
beneficial ownership interests in, securities represented in global form, or
for maintaining, supervising or receiving any records relating to such
beneficial ownership interests maintained by DTC.
Concerning the Trustee
Harris Trust and Savings Bank is the trustee under the indenture and we have
appointed them as the initial registrar and paying agent with respect to the
securities.
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<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. A broker-
dealer may use this prospectus, as it may be amended or supplemented from time
to time, in connection with resales of Exchange Securities received in exchange
for Restricted Securities where the Restricted Securities were acquired as a
result of market-making activities or other trading activities. We have agreed
that, for a period of 180 days after the Expiration Date, we will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale.
We will not receive any proceeds from any sale of Exchange Securities by
broker-dealers. Broker-dealers may sell from time to time Exchange Securities
they receive for their own account pursuant to the exchange offer
. in one or more transactions in the over-the-counter market,
. in negotiated transactions,
. through the writing of options on the Exchange Securities or
. a combination of such methods of resale.
Such broker-dealers may sell at
. market prices prevailing at the time of resale,
. prices related to such prevailing market prices or
. negotiated prices.
Any broker-dealer may resell directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from the broker-dealer or the purchasers of the Exchange
Securities. Any broker-dealer that resells Exchange Securities that it received
for its own account pursuant to the exchange offer and any broker or dealer
that participates in a distribution of the Exchange Securities may be an
"underwriter" within the meaning of the Securities Act. Any profit on any
underwriter's resale of Exchange Securities and any commission or concessions
received by any underwriter's may be underwriting compensation under the
Securities Act. The letter of transmittal states that, a broker-dealer does not
admit that it is an "underwriter" within the meaning of the Securities Act by
acknowledging that it will deliver and by delivering a prospectus.
For a period of 180 days after the expiration date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests them in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the securities) other
than commissions or concessions of any broker-dealers and will indemnify the
holders of the securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
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LEGAL MATTERS
Morgan, Lewis & Bockius LLP will pass upon the validity of the Exchange
Securities for us.
EXPERTS
The consolidated financial statements of Rite Aid and its subsidiaries as of
February 28, 1998 and March 1, 1997 and for each of the years in the three-year
period ended February 28, 1998, and the related financial statement schedule,
have been incorporated by reference herein and in the registration statement in
reliance upon the reports of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon authority of said firm
as experts in accounting and auditing.
With respect to the unaudited interim financial information of Rite Aid and
subsidiaries for the periods ended May 30, 1998, August 29, 1998 and November
28, 1998, incorporated by reference herein, the independent certified public
accountants have reported that they applied limited procedures in accordance
with professional standards for a review of such information. However, their
separate reports included in Rite Aid's quarterly reports on Form 10-Q for the
quarters ended May 30, 1998, August 29, 1998 and November 28, 1998, and
incorporated by reference herein, state that they did not audit and they do not
express an opinion on the interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. The accountants
are not subject to the liability provisions of Section 11 of the Securities Act
of 1933 for their report on the unaudited interim financial information because
that report is not a "report" or a "part" of the registration statement
prepared or certified by the accountants within the meaning of Sections 7 and
11 of the Act.
20
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Rite Aid has not authorized any person to give any information or make any
representations other than those contained in this prospectus, and, if given
or made, you must not rely on any such information or representations as
having been authorized by Rite Aid. This prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any securities other than
the securities to which it relates or an offer to sell or the solicitation of
an offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of Rite Aid since the date hereof or
that the information contained herein is correct as of any time subsequent to
its date.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Company................................................................ 2
Recent Developments........................................................ 3
Available Information...................................................... 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 4
Exchange Offer............................................................. 4
Description of the Securities.............................................. 12
Plan of Distribution....................................................... 19
Legal Matters.............................................................. 20
Experts.................................................................... 20
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Rite Aid Corporation
----------------
PROSPECTUS
----------------
Offer to Exchange 5 1/2% Notes
Due 2000, 6% Notes Due 2005, 6 1/8% Notes Due 2008 and
6 7/8% Debentures Due 2028 for 5 1/2% Notes Due 2000,
6% Notes Due 2005,
6 1/8% Notes Due 2008 and
6 7/8% Debentures Due 2028
, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides that a Delaware
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. A Delaware
corporation may indemnify any person under such section in connection with a
proceeding by or in the right of the corporation to procure judgment in its
favor, as provided in the preceding sentence, against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
with the defense or settlement of such action, except that no indemnification
shall be made in respect thereof unless, and then only to the extent that, a
court of competent jurisdiction shall determine upon application that such
person is fairly and reasonably entitled to indemnity for such expenses as the
court shall deem proper. A Delaware corporation must indemnify any person who
was successful on the merits or otherwise in defense of any action, suit or
proceeding or in defense of any claim, issue or matter in any proceeding, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith. A Delaware corporation may pay for the expenses (including
attorneys' fees) incurred by an officer or director in defending a proceeding
in advance of the final disposition upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
corporation.
Registrant's Restated Certificate of Incorporation and By-Laws provide
Registrant will indemnify and hold harmless each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person or a person of whom such person is the
legal representative is or was a director or officer of Registrant or is or was
serving at the request of Registrant as a director or officer of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director or
officer or in any other capacity while serving as a director or officer shall
be indemnified and held harmless by Registrant to the fullest extent authorized
by the Delaware General Corporation Law as the same exists or may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits Registrant to provide broader indemnification rights than said law
permitted Registrant to provide prior to such amendment). The indemnity may
include all expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid to be paid in
settlement) reasonably incurred or suffered by such person in connection with
such proceeding and such indemnification shall continue as to a person who has
ceased to be a director, officer, employee or agent of Registrant and shall
inure to the benefit of such person's heirs, executors and administrators.
Section 102(b)(7) of the Delaware General Corporation Law provides that a
Delaware corporation may in its articles of incorporation eliminate or limit
the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director except for
liability: for any breach of the director's duty of loyalty to the corporation
or its stockholders; for acts or omissions not in good faith or
II-1
<PAGE>
which involve intentional misconduct or a knowing violation of law; under
Section 174 (pertaining to certain prohibited acts including unlawful payment
of dividends or unlawful purchase or redemption of the corporation's capital
stock); or for any transaction from which the director derived an improper
personal benefit. Registrant's Restated Certificate of Incorporation eliminates
the liability of directors for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the director's duty of
loyalty to Registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit, and provide that if the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of Registrant shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended.
The Delaware General Corporation Law permits the purchase of insurance on
behalf of directors and officers against any liability asserted against
directors and officers and incurred by such persons in such capacity, or
arising out of their status as such, whether or not the corporation would have
the power to indemnify offices and directors against such liability.
Registrant's Restated Certificate of Incorporation allows Registrant to
maintain insurance, at its expense, to protect itself and any director,
officer, employee or agent of Registrant or another corporation, partnership,
joint venture, trust or other enterprise against any expense, liability or
loss, whether or not Registrant would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law. Registrant has obtained liability coverage, which includes coverage to
reimburse Registrant for amounts required or permitted by law to be paid to
indemnify directors and officers.
The foregoing summary of the Delaware General Corporation Law, Registrant's
Restated Certificate of Incorporation and Registrant's By-Laws is qualified in
its entirety by reference to the relevant provisions of the Delaware General
Corporation Law and by reference to the relevant provisions of Registrant's
Restated Certificate of Incorporation and the relevant provisions of
Registrant's By-Laws.
Item 21. Exhibits and Financial Statement Schedules
(a) The following exhibits, as required by Item 601 of Regulation S-K, are
filed as part of this Registration Statement (previously filed except where
otherwise indicated):
<TABLE>
<C> <S>
4.1 Indenture, dated as of December 21, 1998, by and among Rite Aid
Corporation and Harris Trust and Savings Bank, as Trustee.
4.2 Exchange and Registration Rights Agreement, dated as of December 21,
1998, by and among Rite Aid Corporation, J.P. Morgan Securities Inc.,
Salomon Smith Barney Inc., Lehman Brothers Inc., Nationsbanc Montgomery
Securities LLC, ABN AMRO Incorporated and Chicago Capital Markets Inc.
Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
5 securities being registered.
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
15 Letter re Unaudited Interim Financial Information.
23.1 Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5).
23.2 Consent of KPMG LLP.
24 Powers of Attorney (contained on signature page).
Statement of Eligibility of Harris Trust and Savings Bank, as Trustee,
25 on Form T-1.
99.1 Form of Letter of Transmittal respecting the offer to exchange 5 1/2%
Notes due 2000, 6% Notes due 2005, 6 1/8% Notes due 2008 and 6 7/8%
Notes due 2028 which have been registered under the Securities Act for
5 1/2% Notes due 2000, 6% Notes due 2005, 6 1/8% Notes due 2008 and
6 7/8% Debentures due 2028.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>
II-2
<PAGE>
(b) Financial Statement Schedules:
Financial Statement Schedules filed herewith:
None applicable.
Item 22. Undertakings.
(a)(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the co-
registrants pursuant to the provisions described under Item 20 or otherwise,
the co-registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by a
co-registrant of expenses incurred or paid by a director, officer or
controlling person of such co-registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, such co-
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Camp Hill, Commonwealth
of Pennsylvania on March 19, 1999.
RITE AID CORPORATION
By: /s/ Martin L. Grass
----------------------------------
Martin L. Grass
Chairman of the Board
and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Rite Aid Corporation, hereby
severally and individually constitute and appoint Frank M. Bergonzi, Elliot S.
Gerson and Richard J. Varmecky, and each of them, the true and lawful attorneys
and agents (with full power of substitution and resubstitution in each case) of
each of us to execute in the name, place and stead of each of us (individually
and in any capacity stated below) any and all amendments to this Registration
Statement on Form S-4 and all instruments necessary or advisable in connection
therewith and to file the same with the Securities and Exchange Commission,
each of said attorneys and agents to have full power and authority to do and
perform in the name and on behalf of each of the undersigned every act
whatsoever necessary or advisable to be done in the premises as fully and to
all intents and purposes as any of the undersigned might or could do in person,
and we hereby ratify and confirm our signatures as they may be signed by our
said attorneys and agents or each of them to any and all amendments and
instruments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
/s/ Martin L. Grass Chairman of the March 19, 1999
- ----------------------------------- Board and Chief
Martin L. Grass Executive Officer
(Principal
Executive Officer)
/s/ Timothy J. Noonan President, Chief March 19, 1999
- ----------------------------------- Operating Officer
Timothy J. Noonan and Director
/s/ Frank M. Bergonzi Executive Vice March 19, 1999
- ----------------------------------- President and Chief
Frank M. Bergonzi Financial and
Accounting Officer
(Principal Financial
and Accounting
Officer)
/s/ Franklin C. Brown Vice Chairman of the March 19, 1999
- ----------------------------------- Board and Director
Franklin C. Brown
/s/ William J. Bratton Director March 19, 1999
- -----------------------------------
William J. Bratton
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Alex Grass Director March 19, 1999
- -----------------------------------
Alex Grass
/s/ Leonard I. Green Director March 19, 1999
- -----------------------------------
Leonard I. Green
/s/ Nancy A. Lieberman Director March 19, 1999
- -----------------------------------
Nancy A. Lieberman
/s/ Philip Neivert Director March 19, 1999
- -----------------------------------
Philip Neivert
/s/ Leonard N. Stern Director March 19, 1999
- -----------------------------------
Leonard N. Stern
/s/ Preston Robert Tisch Director March 19, 1999
- -----------------------------------
Preston Robert Tisch
/s/ Gerald Tsai, Jr. Director March 19, 1999
- -----------------------------------
Gerald Tsai, Jr.
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4.1 Indenture, dated as of December 21, 1998, by and among Rite Aid
Corporation and Harris Trust and Savings Bank, as Trustee.
4.2 Exchange and Registration Rights Agreement, dated as of December 21,
1998, by and among Rite Aid Corporation, J.P. Morgan Securities Inc.,
Salomon Smith Barney Inc., Lehman Brothers Inc., Nationsbanc
Montgomery Securities LLC, ABN AMRO Incorporated and Chicago Capital
Markets Inc.
Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
5 securities being registered.
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
15 Letter re Unaudited Interim Financial Information.
23.1 Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5).
23.2 Consent of KPMG LLP.
24 Powers of Attorney (contained on signature page).
Statement of Eligibility of Harris Trust and Savings Bank, as Trustee,
25 on Form T-1.
99.1 Form of Letter of Transmittal respecting the offer to exchange 5 1/2%
Notes due 2000, 6% Notes due 2005, 6 1/8% Notes due 2008 and 6 7/8%
Notes due 2028 which have been registered under the Securities Act for
5 1/2% Notes due 2000, 6% Notes due 2005, 6 1/8% Notes due 2008 and 6
7/8% Debentures due 2028.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 4.1
RITE AID CORPORATION
as Issuer
TO
HARRIS TRUST AND SAVINGS BANK
As Trustee
__________________________
Indenture
Dated as of December 21, 1998
__________________________
$200,000,000 5 1/2% Notes due 2000
$200,000,000 6% Notes due 2005
$150,000,000 6 1/8% Notes due 2008
$150,000,000 6 7/8% Debentures due 2028
- --------------------------------------------------------------------------------
<PAGE>
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture dated as of December 21, 1998
Trust Indenture Indenture
Act Section Section
- --------------- ---------
(S) 310
(a)(1) ........................................ 6.09
(a)(2) ........................................ 6.09
(a)(3) ........................................ Not Applicable
(a)(4) ........................................ Not Applicable
(b) ........................................ 6.08
6.10
(S) 311 (a) ........................................ 6.13
(b) ........................................ 6.13
(b)(2) ........................................ 7.03
(S) 312 (a) ........................................ 7.01
7.02(a)
(b) ........................................ 7.02(b)
(c) ........................................ 7.02(c)
(S) 313 (a) ........................................ 7.03(a)
(b) ........................................ 7.03(a)
(c) ........................................ 7.03(a)
(d) ........................................ 7.03(b)
(S) 314 (a) ........................................ 7.04
(b) ........................................ Not Applicable
(c)(1) ........................................ 1.02
(c)(2) ........................................ 1.02
(c)(3) ........................................ Not Applicable
(d) ........................................ Not Applicable
(e) ........................................ 1.02
(S) 315 (a) ........................................ 6.01
(b) ........................................ 6.02
7.03(a)
(c) ........................................ 6.01
(d) ........................................ 6.01
(d)(1) ........................................ 6.01(a)(1)
(d)(2) ........................................ 6.03(h)
(d)(3) ........................................ 6.01(c)(3)
(e) ........................................ 5.14
<PAGE>
Trust Indenture Indenture
Act Section Section
(S) 316 (a)(1)(A) ....................................... 5.12
(a)(1)(B) ....................................... 5.13
(a)(2) ....................................... Not Applicable
(b) ....................................... 5.08
(S) 317 (a)(1) ....................................... 5.03
(a)(2) ....................................... 5.04
(b) ....................................... 10.03
(S) 318 (a) ....................................... 1.07
____________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
_____________
Page
----
ARTICLE 1
---------
Definitions and Other Provisions of General Application
-------------------------------------------------------
Section 1.01. Definitions............................................... 1
-
Section 1.02. Compliance Certification and Opinions.....................14
--
Section 1.03. Form of Documents Delivered to Trustee....................15
--
Section 1.04. Acts of Holders; Record Date..............................15
--
Section 1.05. Notices, Etc., to Trustee and the Company.................16
--
Section 1.06. Notice to Holders; Waiver.................................17
--
Section 1.07. Conflict with Trust Indenture Act.........................17
--
Section 1.08. Effect of Headings and Table of Contents..................17
--
Section 1.09. Successors and Assigns....................................17
--
Section 1.10. Separability Clause.......................................18
--
Section 1.11. Benefits of Indenture.....................................18
--
Section 1.12. Governing Law.............................................18
--
Section 1.13. Legal Holidays............................................18
--
ARTICLE 2
---------
Security Forms
--------------
Section 2.01. Forms Generally; Initial Forms of Rule 144A
and Regulation S Securities...............................18
--
Section 2.02. Form of Face of Security..................................19
--
ARTICLE 3
---------
The Securities
--------------
Section 3.01. Title and Terms...........................................28
--
Section 3.02. Denominations.............................................28
--
Section 3.03. Execution, Authentication, Delivery and Dating............29
--
Section 3.04. Temporary Securities......................................30
--
Section 3.05. Global Securities.........................................30
--
Section 3.06. Registration, Registration of Transfer and Exchange;
Securities Act Legends....................................32
--
Section 3.07. Mutilated, Destroyed, Lost and Stolen Securities..........36
--
Section 3.08. Payment of Interest; Interest Rights Preserved............37
--
Section 3.09. Persons Deemed Owners.....................................38
--
Section 3.10. Cancellation..............................................38
--
Section 3.11. Computation of Interest...................................39
--
<PAGE>
Page
----
Section 3.12. Cusip Numbers.............................................39
--
ARTICLE 4
---------
Satisfaction and Discharge
--------------------------
Section 4.01. Satisfaction and Discharge of Indenture...................39
--
Section 4.02. Application of Trust Money................................41
--
ARTICLE 5
---------
Remedies
--------
Section 5.01. Events of Default.........................................41
--
Section 5.02. Acceleration of Maturity; Rescission and Annulment........43
--
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee...................................................44
--
Section 5.04. Trustee May File Proofs of Claim..........................45
--
Section 5.05. Trustee May Enforce Claims Without Possession of
Securities................................................46
--
Section 5.06. Application of Money Collected............................46
--
Section 5.07. Limitation on Suits.......................................46
--
Section 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest......................................47
--
Section 5.09. Restoration of Rights and Remedies........................47
--
Section 5.10. Rights and Remedies Cumulative............................48
--
Section 5.11. Delay or Omission Not Waiver..............................48
--
Section 5.12. Control by Holders........................................48
--
Section 5.13. Waiver of Past Defaults...................................48
--
Section 5.14. Undertaking for Costs.....................................49
--
Section 5.15. Waiver of Stay or Extension Laws..........................49
--
ARTICLE 6
---------
The Trustee
-----------
Section 6.01. Certain Duties and Responsibilities.......................49
--
Section 6.02. Notice of Defaults........................................50
--
Section 6.03. Certain Rights of Trustee.................................50
--
Section 6.04. Not Responsible for Recitals or Issuance of Securities....51
--
Section 6.05. May Hold Securities.......................................51
--
Section 6.07. Compensation and Reimbursement............................52
--
Section 6.08. Disqualification; Conflicting Interest....................53
--
Section 6.09. Corporate Trustee Required; Eligibility...................53
--
Section 6.10. Resignation and Removal; Appointment of Successor.........53
--
ii
<PAGE>
Page
----
Section 6.11. Acceptance of Appointment by Successor....................55
--
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business..................................................55
--
Section 6.13. Preferential Collection of Claims Against Company.........55
--
ARTICLE 7
---------
Holders' Lists and Reports by Trustee and Company
-------------------------------------------------
Section 7.01. Company to Furnish Trustee Names and Addresses of
Holders...................................................56
--
Section 7.02. Preservation of Information; Communications to Holders....56
--
Section 7.03. Reports by Trustee........................................56
--
Section 7.04. Reports by Company........................................57
--
Section 7.05. Officers' Certificate with Respect to Change in Interest
Rates.....................................................57
--
ARTICLE 8
---------
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
Section 8.01. Company May Consolidate, Etc., Only on Certain Terms......58
--
Section 8.02. Successor Substituted.....................................59
--
ARTICLE 9
---------
Supplemental Indentures
-----------------------
Section 9.01. Supplemental Indentures Without Consent of Holders........60
--
Section 9.02. Supplemental Indentures with Consent of Holders...........60
--
Section 9.03. Execution of Supplemental Indentures......................61
--
Section 9.04. Effect of Supplemental Indentures.........................61
--
Section 9.05. Conformity with Trust Indenture Act.......................62
--
Section 9.06. Reference in Securities to Supplemental Indentures........62
--
ARTICLE 10
----------
Covenants
---------
Section 10.01. Payment of Principal, Premium and Interest................62
--
Section 10.02. Maintenance of Office or Agency...........................62
--
Section 10.03. Money for Security Payments to Be Held in Trust...........63
--
Section 10.04. Corporate Existence.......................................64
--
Section 10.05. Maintenance of Properties.................................64
--
Section 10.06. Payment of Taxes and Other Claims.........................65
--
Section 10.07. Insurance.................................................65
--
iii
<PAGE>
Page
----
Section 10.08. Restrictions on Funded Debt of Restricted Subsidiaries....65
--
Section 10.09. Restriction on Sales with Leases Back.....................65
--
Section 10.10. Restrictions on Secured Debt..............................66
--
Section 10.11. Restrictions on Permitting Unrestricted Subsidiaries to
become Restricted Subsidiaries............................68
--
Section 10.12. Statement by Officers as to Default.......................68
--
Section 10.13. Waiver of Certain Covenants...............................68
--
ARTICLE 11
----------
Redemption of Securities
------------------------
Section 11.01. Right of Redemption.......................................69
--
Section 11.02. Election to Redeem; Notice to Trustee.....................69
--
Section 11.03. Selection by Trustee of Securities to Be Redeemed.........69
--
Section 11.04. Notice of Redemption......................................70
--
Section 11.05. Deposit of Redemption Price...............................70
--
Section 11.06. Securities Payable on Redemption Date.....................70
--
Section 11.07. Securities Redeemed in Part...............................71
--
ARTICLE 12
----------
Defeasance and Covenant Defeasance
----------------------------------
Section 12.01. Company's Option to Effect Defeasance or Covenant
Defeasance...............................................71
--
Section 12.02. Defeasance and Discharge.................................71
--
Section 12.03. Covenant Defeasance......................................72
--
Section 12.04. Conditions to Defeasance or Covenant Defeasance..........72
--
Section 12.05. Deposited Money and U.S. Government Obligations to
be Held in Trust; Other Miscellaneous Provisions.........74
--
Section 12.06. Reinstatement............................................75
--
iv
<PAGE>
ANNEX A Form of Regulation S Certificate......................A-1
ANNEX B Form of Restricted Securities Certificate.............B-1
ANNEX C Form of Unrestricted Securities Certificate...........C-1
<PAGE>
INDENTURE, dated as of December 21, 1998, between Rite Aid Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 30 Hunter Lane,
Camp Hill, Pennsylvania, 17011, Harris Trust and Savings Bank, an Illinois
banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of (i) $200,000,000 aggregate
principal amount of its 5 1/2% Notes due 2000 ("Notes due 2000"), (ii
$200,000,000 aggregate principal amount of its 6% Notes due 2005 ("Notes due
2005"), (iii) $150,000,000 aggregate principal amount of its 6 1/8% Notes
due 2008 ("Notes due 2008") and (iv) $150,000,000 aggregate principal amount of
its 6 7/8% Debentures due 2028 ("Debentures", and together with the Notes
due 2000, the Notes due 2005 and the Notes due 2008, the "Securities"), each
series in substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture.
All things necessary (i) to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and (ii) to make this Indenture a
valid agreement of the Company, all in accordance with their respective terms,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities of each series, as
follows:
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.0. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
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(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
(whether or not such is indicated herein), and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted as consistently applied by the
Company at the date of such computation; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article 6, are defined in that Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, Euroclear and Cedel, in each
case to the extent applicable to such transaction and as in effect at the time
of such transfer or transaction.
"Attributable Debt" means, as to any particular Sale and Leaseback
Transaction under which the Company or any Restricted Subsidiary is at the time
liable, at any date as of which the amount thereof is to be determined (i) in
the case of any such transaction involving a Capital Lease, the amount on such
date of the Capital Lease Obligation thereunder, or (ii) in the case of any
other such Sale and Leaseback Transaction, the then present value of the minimum
rental
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obligation under such Transaction during the remaining term thereof (after
giving effect to any extensions at the option of the lessor) computed by
discounting the respective rental payments at the actual interest factor
included in such payment, or, if such interest factor included in such payment,
or, if such interest factor cannot be readily determined, at the rate per annum
equal to the rate of interest on the Securities. The amount of any rental
payment required to be made under any such Sale and Leaseback Transaction not
involving a Capital Lease may exclude amounts required to be paid by the lessee
on account of maintenance and repairs, insurance, taxes, assessments, utilities,
operating and labor costs and similar charges.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in The City of New York or in the city in which the
Corporate Trust Office is located are authorized or obligated by law,
regulation, executive order or governmental decree to close.
"Capital Lease" means any lease of property which, in accordance with
generally accepted accounting principles, should be capitalized on the lessee's
balance sheet or for which the amount of asset and liability thereunder as if so
capitalized should be disclosed in a note to such balance sheet; and "Capital
Lease Obligation" means the amount of the liability so capitalized or disclosed
(or which should be so disclosed) in a note in respect of a Capital Lease.
"Cedel" means Cedel Bank, S.A. (or any successor securities clearing
agency).
"Closing Date" means December 21, 1998.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
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"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture and thereafter "Company" shall mean such
successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary and delivered to the Trustee.
"Consolidated Funded Debt" means the total of all outstanding Funded Debt
of the Company and its Restricted Subsidiaries, determined on a consolidated
basis in accordance with generally accepted accounting principles.
"Consolidated Net Tangible Assets" means (a) the total amount of assets
(less applicable reserves and other properly deductible items) which under
generally accepted accounting principles would be included on a consolidated
balance sheet of the Company and its Restricted Subsidiaries after deducting
therefrom (i) all liabilities and liability items, including amounts in respect
of obligations or guarantees of obligations under leases, which under generally
accepted accounting principles would be included on such balance sheet, except
Funded Debt, capital stock and surplus, surplus reserves and provisions for
deferred income taxes, and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, which in each
case under generally accepted accounting principles would be included on such
consolidated balance sheet, less (b) the amount which would be so included on
such consolidated balance sheet for Investments (less applicable reserves) (i)
made in Unrestricted Subsidiaries or (ii) made in corporations while they were
Unrestricted Subsidiaries but which at the time of computation are not
Subsidiaries of the Company.
"Corporate Trust Office" means the principal office of the Trustee in the
City of Chicago, State of Illinois, at which at any particular time its
corporate trust business shall be administered.
"corporation" means a corporation, association, company, joint-stock
company, partnership or business trust.
"Depositary" means, with respect to any Securities, a clearing agency that
is registered as such under the Exchange Act and is designated by the Company to
act as Depositary for such Securities (or any successor securities clearing
agency so registered).
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"DTC" means The Depository Trust Company, a New York corporation.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System (or any successor securities
clearing agency).
"Event of Default" has the meaning specified in Section 501.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated as of December 21, 1998, among the Company,
J.P. Morgan Securities Inc., Salomon Smith Barney Inc., Lehman Brothers Inc.,
Nationsbanc Montgomery Securities LLC, ABN AMRO Incorporated and First Chicago
Capital Markets, Inc., as the Initial Purchasers, and the Holders from time to
time as provided therein, as such agreement may be amended from time to time.
"Exchange Offer" means an offer made by the Company pursuant to the
Exchange and Registration Rights Agreement under an effective registration
statement under the Securities Act to exchange securities substantially
identical to Outstanding Securities (except for the differences provided for
herein) for Outstanding Securities of the same series.
"Exchange Registration Statement" means a registration statement of the
Company under the Securities Act registering Exchange Securities for
distribution pursuant to the Exchange Offer.
"Exchange Act" refers to the Securities Exchange Act of 1934 as it may be
amended and any successor act thereto.
"Exchange Securities" means the Securities issued pursuant to the Exchange
Offer and their Successor Securities.
"Funded Debt" means any indebtedness for money borrowed, created, issued,
incurred, assumed or guaranteed, whether secured or unsecured, maturing more
than one year after the date of determination thereof and any indebtedness,
regardless of its term, renewable pursuant to the terms thereof or of a
revolving credit or similar agreement effective for more than one year after the
date of the creation of the indebtedness, which would, in accordance with
generally accepted accounting practice, be classified as funded debt but shall
not include:
(a) any indebtedness for the payment, redemption or satisfaction of which
money (or evidences of indebtedness, if permitted under the instrument creating
such indebtedness) in the necessary amount shall have been deposited in
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trust with the Trustee or proper depository either at or before maturity or
redemption date thereof; or
(b) guarantees arising in connection with the sale, discount, guarantee or
pledge of Securities, chattel mortgages, leases, accounts receivable, trade
acceptances and other paper arising, in the ordinary course of business, out of
installment or conditional sales to or by, or transactions involving title
retention with, distributors, dealers or other customers of merchandise,
equipment or services or guarantees other than guarantees of indebtedness for
borrowed money; or
(c) any liability resulting from the capitalization of lease rentals.
"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"indebtedness" means (i) all items of indebtedness or liability (except
capital and surplus) which in accordance with generally accepted accounting
principles would be included in determining total liabilities as shown on the
liability side of a balance sheet as at the date as of which indebtedness is to
be determined, (ii) indebtedness secured by any Mortgage existing on property
owned subject to such Mortgage, whether or not the indebtedness secured thereby
shall have been assumed, and (iii) guarantees, endorsements (other than for
purposes of collection) and other contingent obligations in respect of, or to
purchase or otherwise acquire, indebtedness of others, unless the amount thereof
is included in indebtedness under the preceding clauses (i) or (ii); provided,
however, that any obligations or guarantees of such obligations or guarantees of
obligations in respect of lease rentals, whether or not such obligations or
guarantees of obligations would be included as liabilities on a consolidated
balance sheet of the Company and its Restricted Subsidiaries, shall not be
included in indebtedness.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
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"Initial Purchasers" means J.P. Morgan Securities Inc., Salomon Smith
Barney Inc., Lehman Brothers Inc., Nationsbanc Montgomery Securities LLC, ABN
AMRO Incorporated and First Chicago Capital Markets, Inc., as purchasers of the
Securities from the Company pursuant to the Purchase Agreement.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investments" mean and include all investments, whether by acquisition of
stock or indebtedness, or by loan, advance, transfer of property, capital
contribution or otherwise, made by the Company or by any Restricted Subsidiary,
and shall include all guarantees, direct or indirect, by the Company or any
Restricted Subsidiary of any indebtedness of an Unrestricted Subsidiary which by
its term matures 12 months or less from the time of computation of the amount
thereof to the extent not included as a liability or liability item on the
consolidated balance sheet of the Company and its Restricted Subsidiaries, but
shall not include accounts receivable of the Company or of any Restricted
Subsidiary arising from the sale of merchandise in the ordinary course of
business.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Mortgage" means and includes any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company and delivered
to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Original Securities" means all Securities other than Exchange Securities.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
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(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities which have been transferred pursuant to Section 3.06 or
in exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(iv) Securities paid pursuant to Section 3.07;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities of any series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
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"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.07 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated December 16, 1998,
between the Company and the Initial Purchasers.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Default" means the occurrence of any of the following events:
(i) the Company has not filed the Exchange Registration Statement or Shelf
Registration Statement on or before the date on which such registration
statement is required to be filed pursuant to the Exchange and Registration
Rights Agreement, (ii) the Exchange Registration Statement or Shelf Registration
Statement has not become effective or been declared effective by the Commission
on or before the date on which such registration statement is required to become
or be declared effective under the requirements of the Exchange and Registration
Rights Agreement, (iii) the Exchange Offer has not been completed on or before
the date required by the Exchange and Registration Rights Agreement or (iv) any
Exchange Registration Statement or Shelf Registration Statement required to be
filed pursuant the Exchange and Registration Rights Agreement is filed and
declared effective but shall thereafter either be withdrawn by the Company or
shall become subject to an effective stop order issued pursuant to Section 8(d)
of the Securities Act suspending the effectiveness of such registration
statement (except as specifically permitted herein) without being succeeded
immediately by an additional registration statement filed and declared
effective.
"Registration Default Period" means any period during which a Registration
Default has occurred and is continuing.
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"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" means a certificate substantially in the form
set forth in Annex A.
"Regulation S Global Securities" has the meaning specified in Section 2.01.
"Regulation S Legend" means a legend substantially in the form of the
legend required in the form of Security set forth in Section 2.02 to be placed
upon Regulation S Securities.
"Regulation S Securities" means all Securities required pursuant to Section
3.06(c) to bear a Regulation S Legend.
"Responsible Officer", when used with respect to the Trustee, means any
vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, any trust officer or assistant trust officer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Period" means the period of 40 consecutive days beginning on
the later of (i) the day on which Securities are first offered to persons other
than distributors (as defined in Regulation S) in reliance on Regulation S and
(ii) the Closing Date.
"Restricted Securities" means all Securities required pursuant to Section
3.06(c) to bear a Restricted Securities Legend. Such term includes the
Restricted Global Securities.
"Restricted Securities Certificate" means a certificate substantially in
for form set forth in Annex B.
"Restricted Securities Legend" means a legend substantially in the form of
the legend required in the form of Security set forth in Section 2.02 to be
placed upon a Restricted Security.
"Restricted Subsidiary" means any Subsidiary, whether existing on or after
the date of this Indenture, unless such Subsidiary is an Unrestricted
Subsidiary.
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"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means the Securities purchased by the Initial
Purchasers from the Company pursuant to the Purchase Agreement, other than the
Regulation S Securities.
"Secured Debt" means indebtedness for money borrowed which is secured by a
mortgage, pledge, lien, security interest or encumbrance on property of the
Company or any Restricted Subsidiary, but shall not include guarantees arising
in connection with the sale, discount, guarantee or pledge of notes, chattel
mortgages, leases, accounts receivable, trade acceptances and other paper
arising, in the ordinary course of business, out of installment or conditional
sales to or by, or transactions involving title retention with, distributors,
dealers or other customers, of merchandise, equipment or services.
"Securities" means Securities designated in the first paragraph of the
RECITALS OF THE COMPANY and includes the Original Securities and the Exchange
Securities.
"Securities Act" means the Securities Act of 1933, as it may be amended and
any successor act thereto.
"Securities Act Legends" means the Registered Securities Legend and the
Regulation S Legend.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.06(a).
"Shelf Registration Statement" means a shelf registration statement under
the Securities Act filed by the Company, if required by, and meeting the
requirements of, the Exchange and Registration Rights Agreement, registering
Original Securities for resale.
"Special Interest Payments" has the meaning specified in the form of
Securities set forth in Section 2.02.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by Trustee pursuant to Section 3.08.
"Stated Maturity" means, with respect to any Security, the date specified
in such Security as the fixed date on which the final payment of principal of
such
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Security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
"Successor Security" of any particular Security means every Security issued
after, and evidencing all or a portion of the same debt as that evidenced by,
such particular Security; and, for the purpose of this definition, any Security
authenticated and delivered under Section 3.07 in exchange for or in lieu of a
----
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in Section
9.05; provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (a) any Subsidiary which, in accordance
with the provisions of this Indenture, has been designated by a Board Resolution
as an Unrestricted Subsidiary, in each case unless and until such Subsidiary
shall, in accordance with the provisions of this Indenture, be designated by
Board Resolution as a Restricted Subsidiary; and (b) any Subsidiary a majority
of the Voting Stock of which shall at the time be owned directly or indirectly
by one or more Unrestricted Subsidiaries.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by
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and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such obligation evidenced by such depository receipt or a
specific payment of interest on or principal of any such obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the obligation set forth in
(i) or (ii) above or the specific payment of interest on or principal of such
obligation evidenced by such depository receipt.
"U.S. Person" means (i) any individual resident in the United States, (ii)
any partnership or corporation organized or incorporated under the laws of the
United States, (iii) any estate of which an executor or administrator is a U.S.
Person (other than an estate governed by foreign law and of which at least one
executor or administrator is a non-U.S. Person who has sole or shared investment
discretion with respect to its assets), (iv) any trust of which any trustee is a
U.S. Person (other than a trust of which at least one trustee is a non-U.S.
Person who has sole or shared investment discretion with respect to its assets
and no beneficiary of the trust (and no settlor if the Trust is revocable) is a
U.S. Person), (v) any agency or branch of a foreign entity located in the United
States, (vi) any non-discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a U.S.
Person, (vii) any discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States (other than such an account held for
the benefit or account of a non-U.S. Person), (viii) any partnership or
corporation organized or incorporated under the laws of a foreign jurisdiction
and formed by a U.S. Person principally for the purpose of investing in
securities not registered under the Securities Act (unless it is organized or
incorporated, and owned, by accredited investors within the meaning of Rule
501(a) under the Securities Act who are not natural persons, estates or trusts);
provided, however, that the term "U.S. Person" does not include (A) a branch or
agency of a U.S. Person that is located and operating outside the United States
for valid business purposes as a locally regulated branch or agency engaged in
the banking or insurance business, (B) any employee benefit plan established and
administered in accordance with the law, customary practices and documentation
of a foreign country and (C) the international organizations set forth in
Section 9.02(o)(7) of Regulation S under the Securities Act and any other
similar international organizations, and their agencies, affiliates and pension
plans.
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"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly-owned Restricted Subsidiary" means a Restricted Subsidiary of which
at least 99% of the outstanding Voting Stock (other than directors' qualifying
shares) is at the time, directly or indirectly, owned by the Company, or by one
or more Wholly-owned Restricted Subsidiaries, or by the Company and one or more
Wholly-owned Restricted Subsidiaries.
Section 1.02. Compliance Certification and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee such certificates
and opinions as may be required by the Trustee under the Trust Indenture Act.
Each such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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Section 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representa tions by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.04. Acts of Holders; Record Date. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are received by the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
----
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law
15
<PAGE>
to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 7.01)
----
prior to such first solicitation or vote, as the case may be. With regard to
any record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
Section 1.05. Notices, Etc., to Trustee and the Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust Trustee
Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the
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<PAGE>
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.06. Notice to Holders; Waiver. Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Section 1.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with a provision of the Trust Indenture Act, that
is required under such Act to be part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be. Until such time as this
Indenture shall be qualified under the Trust Indenture Act, this Indenture, the
Company and the Trustee shall be deemed for all purposes hereof to be subject to
and governed by the Trust Indenture Act to the same extent as would be the case
if this Indenture were so qualified on the date hereof.
Section 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.09. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
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Section 1.10. Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.11. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.12. Governing Law. This Indenture and the Securities shall be
governed by and construed in accordance with the laws of the State of New York
without regard to the conflicts of laws principles thereof.
Section 1.13. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, or Redemption
Date, or at the Stated Maturity, as the case may be, provided that no interest
shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
ARTICLE 2
Security Forms
Section 2.01. Forms Generally; Initial Forms of Rule 144A and Regulation S
Securities. The Securities and the Trustee's certificates of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.
Upon their original issuance, Rule 144A Securities of each series shall be
issued in the form of one or more Global Securities without interest coupons
registered in the name of DTC, as Depositary, or its nominee and deposited with
the Trustee, as custodian for DTC, in New York, New York, for credit by DTC to
18
<PAGE>
the respective accounts of beneficial owners of the Securities represented
thereby (or such other accounts as they may direct). Such Global Securities,
together with their Successor Securities which are Global Securities other than
Regulation S Global Securities, are collectively herein called the "Restricted
Global Securities".
Upon their original issuance, Regulation S Securities of each series
(herein called the "Regulation S Global Securities") shall be issued in the form
of one or more Global Securities without interest coupons registered in the name
of DTC, as Depositary, or its nominee and deposited with the Trustee at its
Corporate Trust Office, as custodian for DTC, for credit to Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euroclear System,
and Cedel to the respective accounts of beneficial owners of the Securities of
such series represented thereby (or such other accounts as they may direct) in
accordance with the rules thereof.
Section 2.02. Form of Face of Security. [If the Security is a Restricted
Security, then insert -- THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE
HOLDER (I) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON WHICH THIS SECURITY WAS
HELD BY THE COMPANY OR ANY AFFILIATE OF THE COMPANY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE UNDER RULE 144A, TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT (IF AVAILABLE);
AND (II) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS CERTIFICATE (UNLESS THIS CERTIFICATE IS HELD IN GLOBAL
FORM) WITHIN TWO YEARS (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE
144(k) (OR ANY SUCCESSOR PROVISION) UNDER THE SECURITIES ACT) AFTER
19
<PAGE>
THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON WHICH
THIS SECURITY WAS HELD BY THE COMPANY OR ANY AFFILIATE OF THE COMPANY, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS; AND
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN THE ABOVE
PARAGRAPH.
THIS SECURITY WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER UNLESS THE
REGISTRAR OR TRANSFER AGENT IS SATISFIED THAT THE RESTRICTIONS ON TRANSFER SET
FORTH ABOVE HAVE BEEN COMPLIED WITH, ALL AS PROVIDED IN THE INDENTURE.]
[If the Security is a Global Security, then insert -- THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[If the Security is a Global Security and The Depository Trust Company is
to be the Depositary therefor, then insert -- UNLESS THIS SECURITY IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE
20
<PAGE>
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[If the Security is a Regulation S Security, then insert -- THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 , AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS THIS
SECURITY IS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.]
RITE AID CORPORATION
$___,000,000 __% _______ due _______
No.
CUSIP:_________
Rite Aid Corporation, a Delaware corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum set forth on Schedule A hereof on December
15, ____, at the office or agency of the Company in the City of Chicago, State
of Illinois, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semi-annually on June 15 and December 15 of each
year (each, an "Interest Payment Date"), on said principal sum at a rate of __%
per annum, at such office or agency, in like coin or currency, from the June 15
or December 15, as the case may be, to which interest on the Securities has been
paid preceding the date hereof (unless the date hereof is a June 15 or a
December 15 to which interest has been paid, in which case from the date hereof,
or unless the date hereof is prior to any interest having been paid, in which
case from December 21, 1998) until payment of said principal sum has been made
or duly provided for. If the Company shall default in the payment of interest
when due on such June 15 or December 15, then this Security shall bear interest
from the next preceding date to which interest has been paid, or, if no interest
has been paid, from December 21, 1998. The interest so payable on any June 15
or December 15 shall be paid to the person in whose name this Security shall be
registered at the close of business on
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<PAGE>
the fifteenth calendar day (whether or not a Business Day) immediately preceding
the related Interest Payment Date (each, a "Regular Record Date"). For purposes
of this Security, "Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions in The City of New York or in the city in
which the Corporate Trust Office is located are authorized or obligated by law,
regulation, executive order or governmental decree to be closed.
If and to the extent the Company shall default in the payment of the
interest due on any interest payment date, such defaulted interest shall be paid
to the person in whose name this Security is registered at the close of business
on a record date established for such payment by notice by or on behalf of the
Company to the holders of the Securities mailed by first-class mail not less
than fifteen days prior to such record date to their last address as they shall
appear upon the Security register, such record date to be not less than five
days preceding the date of payment of such defaulted interest. The Company may
pay interest by check mailed to the holder's address as it appears on the
Security register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Security shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been executed by the Trustee
under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this Security to be signed by
its duly authorized officers and has caused its corporate seal to be affixed
hereunto.
RITE AID CORPORATION
By: -------------------------
Title:
Attest:
- ------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
22
<PAGE>
This is one of the Securities referred to in the within-mentioned
Indenture.
HARRIS TRUST AND SAVINGS BANK,
as Trustee
___________________________________
Authorized Officer
23
<PAGE>
Form of Reverse of Security
RITE AID CORPORATION
__% ______ due _____
1. Indenture. (a) This Security is one of the duly authorized issue of
debt securities of the Company (herein referred to as the "Debt Securities") of
the series hereinafter specified, all issued or to be issued under and pursuant
to an indenture dated as of December 21, 1998 (the "Indenture") between the
Company and Harris Trust and Savings Bank, as Trustee (herein referred to as the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders (the words "holders", "holder", "Securityholders" or
"Securityholder" mean the registered holder(s)) of the Debt Securities.
(b) This Security is one of the series designated as the __% ______ due
____ of the Company and such series is limited in aggregate principal amount to
$___,000,000. References herein to "Securities" shall mean the Debt Securities
of said series.
(c) All capitalized terms used in this Security which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
[Insert for Notes due 2005, Notes due 2008 and Debentures]
[2]. [Optional Redemption. The Securities will be redeemable at the option
of the Company, in whole at any time or in part from time to time, on at least
30 days but not more than 90 days prior written notice mailed to the registered
holders thereof, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Securities to be redeemed and (ii) the sum, as
determined by the Quotation Agent (as defined herein), of the present values of
principal amount of the Securities to be redeemed and the remaining scheduled
payments of interest thereon from the redemption date to the stated maturity
date of such Securities (the "Remaining Life") discounted from their respective
scheduled payment dates to the redemption date on a semi-annual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as
defined herein) plus __ basis points, plus, in either case, accrued interest
thereon to the date of redemption.
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<PAGE>
If money sufficient to pay the redemption price of and accrued interest on
all of the Securities (or portions thereof) to be redeemed on the redemption
date is deposited with the Trustee or a paying agent on or before the redemption
date and certain other conditions are satisfied, then on and after such date,
interest will cease to accrue on such Securities (or such portion thereof)
called for redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity with the Remaining Life of the Securities to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of five Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or if the Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means each of J.P. Morgan Securities Inc.,
Salomon Smith Barney Inc., Lehman Brothers Inc., NationsBanc Montgomery
Securities LLC, ABN AMRO Incorporated and First Chicago Capital Markets, Inc.,
and their respective successors; provided, however, that if any of the foregoing
shall cease to be primary U.S. Government securities dealers in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefore another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer by 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual yield to maturity of the Comparable Treasury
Issue, calculated on the third Business Day preceding such redemption date using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such redemption
date.
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<PAGE>
[3]. Certain Covenants. The Indenture restricts the Company's ability to
merge, consolidate or sell substantially all of its assets. In addition, the
Company is obliged to abide by certain covenants, including covenants limiting
the amount of debt it may incur, as well as its ability to enter into sale and
leaseback transactions, a covenant requiring it to maintain its material
properties, and a covenant requiring it to pay or discharge all taxes, all as
more fully described in the Indenture. All of such covenants are subject to
the covenant defeasance procedures outlined in the Indenture.
[4]. Effect of Event of Default. If an Event of Default shall have
occurred and be continuing under the Indenture, the principal hereof may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
[5]. Amendments and Waivers. Modifications and amendments of the Indenture
will be permitted to be made only with the consent of the holders of not less
than a majority in principal amount of all outstanding Securities issued under
the Indenture that are affected by such modification or amendment; provided that
no such modification or amendment may, without the consent of the holder of each
such Security affected thereby, (a) change the stated maturity of the principal
of, or any installment of interest or principal on, any such Security; (b)
reduce the principal of, or the rate or amount of interest on, or any amount
payable upon redemption of, any such Security, or adversely affect any right of
repayment of the holder of any such Security; (c) change the place of payment,
or the coin or currency, for payment of principal of or interest on any such
Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Security; (e) reduce the above-stated
percentage of outstanding Securities necessary to modify or amend the Indenture,
or to waive compliance with certain provisions thereof or certain defaults and
consequences thereunder; or (f) modify any of the foregoing provisions or any of
the provisions relating to the waiver of certain past defaults or certain
covenants, except to increase the required percentage to effect such action or
to provide that certain other provisions may not be modified or waived without
the consent of the holder of such Security.
Modifications and amendments of the Indenture will be permitted to be made
by the Company and the Trustee without the consent of any holder of Securities
for any of the following purposes: (a) to evidence the succession of another
person to the Company as obligor under the Indenture; (b) to add to the
covenants, agreements and obligations of the Company for the benefit of the
holders of all Securities or all Securities of a series or to surrender any
right or power conferred upon the Company in the Indenture; (c) to provide for
the acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under the Indenture by more than one Trustee; (d)
to cure any ambiguity, defect or inconsistency in the Indenture; (e) to secure
the Securities or
26
<PAGE>
the Securities of a series; or (f) to make any other change that does not
adversely affect the rights of any Holder of Securities of such
series.
[6]. Denominations; Transfer. (a) The Securities are issuable in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.
(b) A certificate in global form representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such Securities or a nominee of
such successor Depositary.
[7]. No Liability of Certain Persons. No past, present or future
stockholder, employee, officer or director of the Company or any successor
thereof shall have any liability for any obligation, covenant or agreement of
the Company contained under this Security or the Indenture. Each holder by
accepting this Security waives and releases all such liability. This waiver and
release are part of the consideration for the issue of this Security.
[8]. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK GOVERN THE INDENTURE
AND THIS SECURITY.
27
<PAGE>
SCHEDULE A
SCHEDULE OF CHANGES IN OUTSTANDING PRINCIPAL AMOUNT
The following notations in respect of changes in the outstanding principal
amount of this Security have been made:
Change in
Initial Outstanding Outstanding
Principal Principal Principal
Date Amount Amount Amount Notation
--------- ------------ ------------- ------------- ------------
ARTICLE 3
The Securities
Section 3.01. Title and Terms. There shall be established four series of
Securities hereunder. The Notes due 2000 shall be known and designated as the
"5 1/2% Notes due 2000", the Notes due 2005 shall be know and designated as
the "6% Notes due 2005", the Notes due 2008 shall be known and designated as the
"6 1/2% Notes due 2008" and the Debentures shall be known and designated as
the "6/7/8% Debentures due 2028". The aggregate amount of Notes due 2000,
Notes due 2005, Notes due 2008 and Debentures which may be authenticated and
delivered hereunder is limited to $200,000,000, $200,000,000, $150,000,000 and
$150,000,000, respectively, except for Securities of a series authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of such series pursuant to Section 3.04, 3.05 or 9.06.
Unless the context otherwise requires, the Original Securities and the
Exchange Securities of a series shall constitute one series for all purposes
under the Indenture, including with respect to any amendment, waiver,
acceleration or other Act of Holders or redemption.
Section 3.02. Denominations. The Securities shall be issuable only in
registered form without coupons and only in denominations of $1,000 and integral
multiples thereof.
Section 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
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<PAGE>
Board, its Vice Chairman, its President or one of its Vice Presidents, thereon
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery such Securities as in
this Indenture provided and not otherwise.
At any time and from time to time after the execution and delivery of this
Indenture and after the effectiveness of a registration statement under the
Securities Act with respect thereto, the Company may deliver Exchange Securities
of a series executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such Exchange
Securities and a like principal amount of Original Securities of such series for
cancellation in accordance with this Indenture, and the Trustee in accordance
with the Company Order shall authenticate and make available for delivery such
Securities. Prior to authenticating such Exchange Securities, and accepting any
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, if requested, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating in
- ----
substance:
(a) that all conditions hereunder precedent to the authentication and
delivery of such Exchange Securities have been complied with and that such
Exchange Securities, when such Securities have been duly authenticated and
delivered by the Trustee (and subject to any other conditions specified in such
Opinion of Counsel), have been duly issued and delivered and will constitute
valid and legally binding obligations of the Company, enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and
(b) that the issuance of the Exchange Securities in exchange for Original
Securities of such series has been effected in compliance with the Securities
Act.
29
<PAGE>
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
Section 3.04. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities of such series, which Securities
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities of such series in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution thereof. If temporary Securities of such series are issued, the
Company will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
at any office or agency of the Company designated pursuant to Section 10.02,
-----
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of such series the Company shall execute and the Trustee
shall authenticate and make available for delivery in exchange therefor a like
principal amount of definitive of such series Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
Section 3.05. Global Securities. (a) Each Global Security authenticated
under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Security for all purposes of
this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities of such series
registered, and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (i) such Depositary (A) has notified the
Company that it is unwilling or unable to continue as Depositary for such Global
Security or (B) has ceased to be a clearing agency registered as such under the
Exchange Act, and in either case the Company fails to appoint a successor
30
<PAGE>
Depositary, (ii) the Company executes and delivers to the Trustee a Company
Order stating that it elects to cause the issuance of the Securities of such
series in certificated form and that all Global Securities of such series shall
be exchanged in whole for Securities of such series that are not Global
Securities (in which case such exchange shall be effected by the Trustee) or
(iii) there shall have occurred and be continuing an Event of Default with
respect to the Securities of such series.
(c) If any Global Security is to be exchanged for other Securities of
such series or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation as provided in this Article 3. If any Global Security is to be
-
exchanged for other Securities of such series or canceled in part, or if another
Security is to be exchanged in whole or in part for a beneficial interest in any
Global Security of such series, then either (i) such Global Security shall be so
surrendered for exchange or cancellation as provided in this Article 3 or (ii)
-
the principal amount thereof shall be reduced or increased by an amount equal to
the portion thereof to be so exchanged or canceled, or equal to the principal
amount of such other Security to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on the
records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to Section 3.06(c) and as otherwise provided in this Article 3,
------- -
authenticate and deliver any Securities of such series issuable in exchange for
such Global Security (or any portion thereof) to or upon the order of, and
registered in such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a reasonable supply of
Securities of such series that are not in the form of Global Securities. The
Trustee shall be entitled to rely upon any order, direction or request of the
Depositary or its authorized representative which is given or made pursuant to
this Article 3 if such order, direction or request is given or made in
-
accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security of such series
or any portion thereof, whether pursuant to this Article 3 or otherwise, shall
-
be authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
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<PAGE>
Indenture and the Securities and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members.
SECTION 3.06. Registration, Registration of Transfer and Exchange;
Securities Act Legends. (a) Registration, Registration of Transfer and Exchange
Generally. The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 10.02 being
-----
herein sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities of such series and of transfers and
exchanges of Securities. The Trustee is hereby appointed "Security Registrar"
for the purpose of registering Securities of such series and transfers and
exchanges of Securities as herein provided. Such Security Register shall
distinguish between Original Securities and Exchange Securities of such series.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.02 for such
-----
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of such series of any authorized denominations, of a like
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
At the option of the Holder, and subject to the other provisions of
this Section 3.06, Securities may be exchanged for other Securities of such
----
series of any authorized denominations, of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, the
Securities of such series which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities of such series shall be the valid obligations of the Company,
evidencing the same debt, and (except for the differences between Original
Securities and Exchange Securities provided for herein) entitled to the same
benefits under this Indenture, as the Securities of such series surrendered upon
such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly
32
<PAGE>
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Sections 3.03, 3.04, 3.05, 3.06, or 9.06 not involving any
---- ---- ---- ---- ----
transfer.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 3.06(b) shall be made only in accordance with this Section
-------
3.06(b).
- -------
(i) Restricted Global Security to Regulation S Global Security.
If the owner of a beneficial interest in a Restricted Global Security
wishes at any time to transfer such interest to a Person who wishes to
acquire the same in the form of a beneficial interest in a Regulation S
Global Security of such series, such transfer may be effected only in
accordance with the provisions of this Clause (b)(i) subject to the
Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in a Regulation S
Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in a
Restricted Global Security of such series in an equal principal amount
be debited from another specified Agent Member's account and (B) a
Regulation S Certificate, duly executed by the owner of such beneficial
interest in a Restricted Global Security or his attorney duly
authorized in writing, then the Trustee, as Security Registrar but
subject to Clause (b)(iv) below, shall reduce the principal amount of
such Restricted Global Security and increase the principal amount of
such Regulation S Global Security by such specified principal amount as
provided in Section 3.05(c).
-------
(ii) Regulation S Global Security to Restricted Global Security.
If the owner of a beneficial interest in a Regulation S Global Security
wishes at any time prior to the expiration of the Restricted Period to
transfer such interest to a Person who wishes to acquire the same in
the form of a beneficial interest in a Restricted Global Security of
such series, such transfer may be effected only in accordance with this
Clause (b)(ii) and subject to the Applicable Procedures. Upon receipt
by the Trustee, as Security Registrar, of (A) an order given by the
Depositary or its authorized representative directing that a beneficial
interest in such
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<PAGE>
Restricted Global Security in a specified principal amount be credited
to a specified Agent Member's account and that a beneficial interest in
a Regulation S Global Security of such series in an equal principal
amount be debited from another specified Agent Member's account and (B)
a Restricted Securities Certificate, duly executed by the owner of such
beneficial interest in such Regulation S Global Security or his
attorney duly authorized in writing, then the Trustee, as Security
Registrar, shall reduce the principal amount of such Regulation S
Global Security and increase the principal amount of such Restricted
Global Security of such series by such specified principal amount as
provided in Section 3.05(c).
-------
(iii) Exchanges between Global Security and Non-Global Security. A
beneficial interest in a Global Security may be exchanged for a
Security of such series that is not a Global Security as provided in
Section 3.05, provided that, if such interest is a beneficial interest
----
in a Restricted Global Security, or if such interest is a beneficial
interest in a Regulation S Global Security prior to the expiration of
the Restricted Period, then such interest shall be exchanged for a
Restricted Security of such series (subject in each case to Section
3.06(c)).
--------
(iv) Regulation S Global Security to be Held Through Euroclear or
Cedel during Restricted Period. The Company shall use its best efforts
to cause the Depositary to ensure that beneficial interests in the
Regulation S Global Securities may be held only in or through accounts
maintained at the Depositary by Euroclear or Cedel (or by Agent Members
acting for the account thereof) during the Restricted Period, and no
person shall be entitled to effect any transfer or exchange that would
result in any such interest being held otherwise than in or through
such an account; provided that this Clause (b)(iv) shall not prohibit
any transfer or exchange of such an interest in accordance with Clause
(b)(ii) above.
(c) Securities Act Legends. Rule 144A Securities and their respective
Successor Securities shall bear a Restricted Securities Legend, and Regulation S
Securities and their Successor Securities shall bear a Regulation S Legend,
subject to the following:
(i) subject to the following Clauses of this Section 3.06(c), a
-------
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security of such series or any portion thereof
shall bear the Securities Act Legend borne by such Global Security
while represented thereby;
(ii) subject to the following Clauses of this Section 3.06(c), a
-------
new Security which is not a Global Security and is issued in
exchange for
34
<PAGE>
another Security (including a Global Security) of such series or any
portion thereof, upon transfer or otherwise, shall bear the Securities
Act Legend borne by such other Security, provided that, if such new
Security is required pursuant to Section 3.06(b)(iii) to be issued in
------------
the form of a Restricted Security, it shall bear a Restricted
Securities Legend and, if such new Security is so required to be issued
in the form of a Regulation S Security, it shall bear a Regulation S
Legend;
(iii) Exchange Securities shall not bear a Securities Act Legend;
(iv) at any time after the Securities may be freely transferred
without registration under the Securities Act or without being subject
to transfer restrictions pursuant to the Securities Act, a new Security
which does not bear a Securities Act Legend may be issued in exchange
for or in lieu of a Security (other than a Global Security) of such
series or any portion thereof which bears such a legend if the Trustee
has received an unlegended Security of such series, duly executed by
the Holder of such legended Security or his attorney duly authorized in
writing, and after such date and receipt of such certificate, the
Trustee shall authenticate and deliver such a new Security of such
series in exchange for or in lieu of such other Security as provided in
this Article 3;
-
(v) a new Security which does not bear a Securities Act Legend may
be issued in exchange for or in lieu of a Security (other than a Global
Security) of such series or any portion thereof which bears such a
legend if, in the Company's judgment, placing such a legend upon such
new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a new
Security as provided in this Article 3; and
-
(vi) notwithstanding the foregoing provisions of this Section
3.06(c), a Successor Security of a Security that does not bear a
-------
particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided
in this Article 3.
-
SECTION 3.07. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of
35
<PAGE>
such series of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by either of them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of such series of like tenor and principal amount,
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security of such series, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security of such series shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.08. Payment of Interest; Interest Rights Preserved. Interest
on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted
36
<PAGE>
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security of such series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
37
<PAGE>
SECTION 3.09. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 3.08) interest on
----
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. Notwithstanding the
foregoing, with respect to any Security in global form, nothing herein shall
prevent the Company or the Trustee, or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by any Depositary (or its nominee), as a Holder, with respect to such
Security in global form or impair, as between such Depositary and owners of
beneficial interests in such Security in global form, the operation of customary
practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Security in global form.
SECTION 3.10. Cancellation. All Securities surrendered for payment,
redemption, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with its customary procedures.
SECTION 3.11. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360 day year of twelve 30-day months.
SECTION 3.12. Cusip Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
38
<PAGE>
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to (i) rights of registration of
transfer and exchange and the Company's right of optional redemption, (ii)
substitution of apparently mutilated, defaced, destroyed, lost or stolen
Securities, (iii) rights of Holders to receive payment of principal and interest
on the Securities, (iv) rights, obligations and immunities of the Trustee under
the Indenture and (v) rights of the Holders of the Securities as beneficiaries
of the Indenture with respect to any property deposited with the Trustee payable
to all or any of them), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
3.07 and (ii) Securities for whose payment money has theretofore been
----
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 10.03) have been delivered to the Trustee for
-----
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,
39
<PAGE>
and the Company, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for prin
cipal (and premium, if any) and interest to the date
of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article 4.01, the obligations of the Company to the Trustee under Section
----
6.07 and, if money shall have been deposited with the Trustee pursuant to
- ----
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 4.02 and the last paragraph of Section 10.03 shall survive.
---- -----
SECTION 4.02. Application of Trust Money. Subject to the provisions of
the last paragraph of Section 10.03, all money deposited with the Trustee
-----
pursuant to Section 4.01 shall be held in trust and applied by it, in accordance
----
with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee but such money need not be separated from
other funds except to the extent required by law.
ARTICLE 5
REMEDIES
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means with respect to Securities of any series any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
40
<PAGE>
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) failure to pay the principal of (or premium, if any, on) any
Security of such series at its Maturity; or
(2) failure to pay any interest upon any Security of such series
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(3) failure to perform or comply with the provisions of Section
8.01; or
----
(4) failure to perform any other covenant or agreement of the
Company in this Indenture or the Securities of such series (other than
a covenant or warranty a default in whose performance or whose breach
is elsewhere in this Section specifically dealt with), and continuance
of such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of such series a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any bond, debenture, note or other evidence of
indebtedness of the Company (including a default with respect to
Securities of any series other than that series) or under any mortgage,
indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness of the Company
(including this Indenture), whether such indebtedness now exists or
shall hereafter be created, which default shall constitute a failure to
pay an aggregate principal amount exceeding $10,000,000 of such
indebtedness when due and payable after the expiration of any
applicable grace period with respect thereto and shall have resulted in
such indebtedness in an aggregate principal amount exceeding
$10,000,000 becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having
been rescinded or annulled, within a period of 10 days after there
shall have been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at
least 10% in principal amount of the Outstanding Securities of such
series a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice
is a
41
<PAGE>
"Notice of Default" hereunder; provided, however, that if such
-------- -------
default under such bond, debenture, note, mortgage, indenture or other
instrument or evidence of indebtedness shall be remedied or cured by
the Company or waived pursuant to such agreement or instrument, then,
unless the maturity of the Securities of such series shall have been
accelerated as provided herein, the Event of Default hereunder by
reason thereof shall be deemed likewise to have been thereupon
remedied, cured or waived without further action upon the part of
either the Trustee or the Holders. Subject to the provisions of Section
6.01 and 6.02, the Trustee shall not be deemed to have knowledge of
such default unless either (A) a Responsible Officer of the Trustee
shall have actual knowledge of such default or (B) the Trustee shall
have received written notice thereof from the Company, from any Holder,
from the holder of any such indebtedness or from the trustee under any
such mortgage, indenture or other instrument; or
(6) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due and its
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willingness to have a case commenced against it or to seek an order for
relief under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law or the taking of corporate action by
the Company in furtherance of any such action.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default (other than an Event of Default specified in Section 5.01(6) or
----
(7)) occurs and is continuing, then and in every such case the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of a series may declare all of the Securities of such series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal and
any accrued interest, if any, shall become immediately due and payable. If an
Event of Default specified in Section 5.01(6) or (7) occurs, the principal and
----
any accrued interest on the Securities of such series then Outstanding shall
ipso facto become immediately due and payable without any declaration or other
Act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Outstanding Securities of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of such
series,
(B) the principal of (and premium, if any, on) any
Securities of such series which have become due otherwise than
by such declaration of acceleration and, to the extent that
payment of such interest is lawful, interest thereon at the
rate provided by the Securities of such series,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate provided by
the Securities of such series, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
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and
(ii) all Events of Default, other than the non-payment of the
principal of Securities of such series which have become due solely by
such declaration of acceleration, have been cured or waived as provided
in Section 5.13.
----
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
provided by the Securities of such series, if any, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon the Securities
of such series, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any
44
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covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of any judicial
proceeding relative to the Company or any other obligor upon the Securities of
such series, or upon the property of the Company or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07.
----
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities of such series or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities of the
series in respect of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities of such series and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
45
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FIRST: To the payment of all amounts due the Trustee under
Section 6.07; and
----
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the
Securities of such series in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and
premium, if any) and interest, respec tively.
SECTION 5.07. Limitation on Suits. No Holder of any Security shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities of such series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
such series;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
46
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SECTION 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 3.08) interest on such Security on the respective Stated
----
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.07, no right or
----
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in
aggregate principal amount of the Outstanding Securities of each series shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee, provided that
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(1) such direction shall not be in conflict with any rule of law
or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of each
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article 9 cannot be modified or amended without the consent of the
-
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, including attorney's
fees and expenses in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Trustee or the Company.
SECTION 5.15. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
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ARTICLE 6
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities. Except during the
continuance of an Event of Default, the duties and responsibilities of the
Trustee shall be as provided by the Indenture. During the existence of an Event
of Default, the Trustee will exercise such rights and powers vested in it under
the Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise under the circumstances in the conduct of such
person's own affairs. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 6.02. Notice of Defaults. The Trustee shall give the Holders
notice of any default hereunder as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 5.01(4), no such notice to Holders shall be given
----
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
----
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein
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specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate or opinion;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture; and
(j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.
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SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Paying Agent, any
Security Registrar or any other agent of the Company, may become the owner or
pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal
---- ----
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any pro
vision of this Indenture, including, but not limited to the costs
incurred in connection with collection (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any and all loss, liability damage, claim or expense,
including taxes (other than taxes based on the income of the Trustee)
incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against or
investigating any claim (including any claim by the Company) or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
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The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 6.07, except with respect to funds
----
held in trust for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.01(5) or Section 5.01(6), the
---- ----
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.08. Disqualification; Conflicting Interest. If the Trustee
has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000 and its Corporate Trust Office in The City
of Chicago, State of Illinois or in The City of New York, State of New York. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
----
(b) The Trustee may resign at any time with respect to one or more or
all series of Securities by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
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resigning Trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of a
series, delivered to the Trustee and to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series of Securities.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.08 after
----
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.09 and
----
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a bona fide
----
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent juris
diction for the removal of the Trustee and the appointment of a successor
Trustee with respect to such series of Securities.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Com pany. If no successor Trustee shall have been so appointed
by the Company or the
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Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders of
Securities of such series in the manner provided in Section 1.06. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee and the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
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SECTION 6.13. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of Securities of each series as of such Regular
Record Date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities of each series
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Securities of each series
----
received by the Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 7.01 upon receipt of a
----
new list so furnished.
(b) The rights of Holders of Securities of a series to communicate
with other Holders of Securities of such series with respect to their rights
under this Indenture or under the Securities of such series and the
corresponding rights and duties of the Trustee, shall be provided by the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
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Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to the names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) The Trustee shall transmit to
Holders of Securities of each series such reports concerning the Trustee and its
actions under this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto. If required by
Section 313(a) of the Trust Indenture Act, the Trustee shall, within sixty days
after each December 1, following the date of this Indenture deliver to Holders
of Securities of each series a brief report, dated as of such December 1, which
complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities of such series are listed, with the Commission and with the Company.
The Company will promptly notify the Trustee when the Securities of any series
are listed on any stock exchange or of any delisting thereof.
SECTION 7.04. Reports by Company. The Company shall file with the
Trustee and the Commission, and transmit to Holders of Securities of each
series, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with Commission pursuant to Section 13
or 15(d) of the Exchange Act shall be filed with the Trustee within 30 days
after the same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 7.05. Officers' Certificate with Respect to Change in Interest
Rates. Within five days after the day on which any Special Interest begins
accruing, and within five days after any Special Interest ceases to accrue, the
Company shall deliver an Officers' Certificate to the Trustee stating the
interest rate thereupon in effect for the Original Securities of such series (if
any are Outstanding) and the date on which such rate became effective.
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ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the corporation
formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and
interest on all the Securities and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed
by supplemental indenture satisfactory in form to the Trustee, executed
and delivered to the Trustee by the Person (if other than the Company)
formed by such consolidation or into which the Company shall have been
merged or by the corporation which shall have acquired the Company's
assets;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or
a Subsidiary as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing with respect to any series of Securities;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by this Indenture, the
Company or such successor corporation or Person, as the case may be,
shall take such steps as shall be necessary effectively to secure the
Securities of each sites equally and ratably with (or prior to) all
indebtedness secured thereby; and
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(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 8.02. Successor Substituted. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any transfer,
conveyance, sale, lease or other disposition of all or substantially all of the
properties and assets of the Company as an entirety in accordance with Section
8.01, the successor Person shall succeed to, and be substituted for, and may
- ----
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company prior to such succession, any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication pursuant to such provisions and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee on its behalf for that purpose pursuant to such provisions. All
Securities so issued in all respects have the same legal rank and benefit under
this Indenture as Securities of such series theretofore or thereafter issued in
accordance with the terms of this Indenture as though all such Securities of
such series had been issued prior to the date of such succession. In case of any
such consolidation, merger, sale or conveyance, such changes in phraseology and
form may be made in the Securities thereafter to be issued as may be
appropriate.
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ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution of the Company and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form satisfactory
to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of Securities of one or more series, or to surrender any right
or power herein conferred upon the Company; or
(3) to secure the Securities of any series; or
(4) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the Trust
Indenture Act; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided such action pursuant to this
Clause (4) shall not adversely affect the interests of the Holders of
Securities of any series in any material respect.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of all series affected by such supplemental indenture
(voting as one class), by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution of the Company and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
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(1) change the Stated Maturity of the principal of, or any
instalment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable thereon,
or change the place of payment where, or the coin or currency in which,
any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof, or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section 9.02 or Section
----
10.13, except to increase any such percentage or to provide that
-----
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
- ----
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities of such series
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
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SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture relating to Securities of such series pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of such series so modified as to
conform, in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE 10
COVENANTS
SECTION 10.01. Payment of Principal, Premium and Interest. The Company
will duly and punctually pay the principal of (and premium, if any) and interest
on the Securities of each series in accordance with the terms of the Securities
of such series and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will give
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prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 10.03. Money for Security Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
Securities of any series, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of each series in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
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such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.04. Corporate Existence. Subject to Article 8, the Company
-
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors in good faith shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 10.05. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary of the Company to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improve
ments thereof, all as in the judgment of the Company may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, as determined
by the Board of Directors in good faith, desirable in the conduct of its
business or the business of any Subsidiary of the Company and not
disadvantageous in any material respect to the Holders.
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SECTION 10.06. Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Subsidiaries or upon the income, profits
or property of the Company or any of its Subsidiaries, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any of its Subsidiaries; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 10.07. Insurance. The Company covenants and agrees that it
will, and will cause each Subsidiary to, insure and keep insured, with reputable
insurance companies, their principal properties, and such insurance shall be in
such amounts (and with such deductibles) as companies engaged in a similar
business in accordance with good business practice customarily insure properties
of a similar character against loss by fire and from other causes or, in lieu
thereof, in the case of itself or of any one or more of its Subsidiaries, it
will maintain or cause to be maintained a program of self-insurance in
accordance with good business practices.
SECTION 10.08. Restrictions on Funded Debt of Restricted Subsidiaries.
The Company covenants and agrees that it will not permit any Restricted
Subsidiary to create, issue, incur, assume, or in any other way become liable
for any unsecured Funded Debt unless the Company would be entitled under
subparagraph (d) of Section 10.10 of this Indenture to create, issue, incur,
-----
assume or guarantee any Secured Debt not specifically permitted under Section
10.10 of this Indenture but for subparagraph (d) thereof in an amount equal to
- -----
such Funded Debt; provided, however, that the foregoing restriction shall not
prevent (i) any Restricted Subsidiary from becoming liable to the Company or to
a Wholly- owned Restricted Subsidiary for Funded Debt or (ii) the extension,
renewal or refunding of any Funded Debt of any Restricted Subsidiary so long as
Consolidated Funded Debt is not thereby increased.
SECTION 10.09. Restriction on Sales with Leases Back. Except for a sale
or transfer by a Restricted Subsidiary to the Company or a Wholly-owned
Restricted Subsidiary, the Company covenants and agrees that it will not, and
will not permit any Restricted Subsidiary to, sell or transfer any manufacturing
plant, warehouse, retail store or equipment owned and operated or hereafter
owned and operated by the Company or a Restricted Subsidiary, with the intention
that the Company or any Restricted Subsidiary take back a lease thereof, except
a lease for a period, including renewals, not exceeding 24 months, by the end of
which period it is intended that the use of such property or equipment by the
lessee will be discontinued (any such transaction being herein referred to as a
"Sale and
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Leaseback Transaction"); provided that, notwithstanding the foregoing, the
Company or any Restricted Subsidiary may enter into a Sale and Leaseback
Transaction if the Company or a Restricted Subsidiary would be entitled under
subparagraph (d) of Section 10.10 to create, issue, incur, assume or guarantee
-----
any Secured Debt not specifically permitted under Section 10.10 of this
-----
Indenture but for subparagraph (d) thereof in an amount equal to the
Attributable Debt respecting such Sale and Leaseback Transaction; provided
further that, notwithstanding the foregoing, the Company or any Restricted
Subsidiary may enter into a Sale and Leaseback Transaction if entered into in
respect of property acquired by the Company or a Restricted Subsidiary if such
Sale and Leaseback Transaction is entered into within 24 months from the date of
such acquisition; and provided still further that, notwithstanding the
foregoing, the Company or any Restricted Subsidiary may enter into a Sale and
Leaseback Transaction if the Company, within 120 days before or after the sale
or transfer shall have been made by the Company or by any Restricted Subsidiary,
applied or applies an amount equal to the greater of (i) the net proceeds of the
sale of the property sold and leased back pursuant to such arrangement or (ii)
the fair market value of the property so sold and leased back at the time of
entering into such arrangement (as determined by any two of the following; the
Chairman of the Board of the Company, its Chief Executive Officer, its
President, any Vice President of the Company, its Treasurer and its Controller)
to the retirement of Secured Debt of the Company other than at maturity or
pursuant to any mandatory sinking fund payment or any mandatory prepayment
provision.
SECTION 10.10. Restrictions on Secured Debt. The Company covenants and
agrees that it will not, and will not permit any Restricted Subsidiary to,
create, issue, incur, assume or guarantee any Secured Debt without making
effective provision (and the Company covenants that in such case it will make or
cause to be made effective provision) whereby the Securities of each series then
Outstanding and any other indebtedness of or guaranteed by the Company or such
Restricted Subsidiary then entitled thereto, shall be secured by such mortgage,
pledge, lien or encumbrance equally and ratably with (or prior to) any and all
other obligations and indebtedness thereby secured for so long as any such other
obligations and indebtedness shall be so secured; provided, however, that the
foregoing covenants shall not be applicable to the following:
(a) (i) Any mortgage, pledge, lien or other encumbrance on any
property acquired or constructed by the Company or a Restricted Subsidiary and
created contemporaneously with, or within 24 months after, such acquisition or
the completion of such construction and commencement of full operation of such
property, whichever is later, to secure or provide for the payment of any part
of the purchase or construction price of such property, or (ii) the acquisition
by the Company or a Restricted Subsidiary of property subject to any mortgage,
pledge, lien or other encumbrance upon such property existing at the time of
acquisition
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thereof, whether or not assumed by the Company or such Restricted Subsidiary, or
(iii) any conditional sales agreement or other title retention agreement with
respect to any property hereafter acquired, provided that the lien of any such
mortgage, pledge, lien or other encumbrance or agreement does not spread to
other property except unimproved real property previously owned upon which any
new construction has taken place and subsequent additions to such acquired or
constructed property.
(b) Any mortgage, pledge, lien, or other encumbrance created for the
sole purposes of extending, renewing or refunding, in whole or part, any
mortgage, pledge, lien or other encumbrance permitted by this Section 10.10 or
-----
any mortgage, pledge, lien or other encumbrance securing the indebtedness of the
Company or of any Restricted Subsidiary on the date of this Indenture or of a
corporation at the time such corporation becomes a Subsidiary, or any
extensions, renewals or refundings of any such mortgage, pledge, lien or other
encumbrance; provided, however, that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of indebtedness so secured
at the time of such extension, renewal or refunding and that such extension,
renewal or refunding mortgage, pledge, lien or other encumbrance shall be
limited to all or that part of the same properties which secured the mortgage,
pledge, lien or other encumbrance extended, renewed or refunded.
(c) Any Secured Debt of a Restricted Subsidiary owing to the Company
or a Wholly-owned Restricted Subsidiary.
(d) Secured Debt of the Company and its Restricted Subsidiaries which
would otherwise be prohibited by the foregoing restrictions (not including
Secured Debt permitted to be secured under subparagraphs (a) through (c) above,
so long as the sum of any such Secured Debt hereafter incurred plus Attributable
Debt of the Company and any Restricted Subsidiaries in respect of existing Sale
and Leaseback Transactions hereafter entered into (excluding Attributable Debt
incurred in respect of any Sale and Leaseback Transaction entered into in
respect of property acquired by the Company or a Restricted Subsidiary not more
than 24 months prior to the date such Transaction is entered into) plus
unsecured Funded Debt of any Restricted Subsidiary hereafter incurred (excluding
unsecured Funded Debt incurred through the extension, renewal or refunding of
Funded Debt where Consolidated Funded Debt was not thereby increased and
excluding any Funded Debt owed to the Company or a Wholly-owned Restricted
Subsidiary) does not at the time exceed 20% of Consolidated Net Tangible Assets.
SECTION 10.11. Restrictions on Permitting Unrestricted Subsidiaries to
become Restricted Subsidiaries .
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(a) The Company will not permit any Unrestricted Subsidiary to be
designated as a Restricted Subsidiary unless such Subsidiary has outstanding no
Secured Debt, Funded Debt and/or Attributable Debt in respect of Sale and
Leaseback Transactions except such Secured Debt, Funded Debt and Attributable
Debt as the Company could permit it to become liable for immediately after
becoming a Restricted Subsidiary under the provisions of Sections 10.08, 10.09
----- -----
and 10.10 of this Indenture.
-----
(b) Promptly after the adoption of any Board Resolution designating a
Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted
Subsidiary as a Restricted Subsidiary, a copy thereof shall be filed with the
Trustee, together, in the case of the designation of an Unrestricted Subsidiary
as a Restricted Subsidiary, with an Officers' Certificate stating that the
provisions of this Section have been complied with in connection with such
designation.
SECTION 10.12. Statement by Officers as to Default. Reference is made
to Section 314(a)(4) of the Trust Indenture Act.
SECTION 10.13. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 10.07 to 10.11, if before the time for such compliance the Holders of
----- -----
at least a majority in principal amount of the Outstanding Securities of each
series affected thereby (voting as a class) shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
ARTICLE 11
REDEMPTION OF SECURITIES
SECTION 11.01. Right of Redemption. The provisions of this Article
shall be applicable to the Securities for any series which are redeemable before
their maturity pursuant to the terms of this Indenture and the Securities of
such series, except to the extent otherwise set forth in the Securities of such
series.
If less than all the Securities are to be redeemed, the Trustee shall
select, in such manner as it shall deem fair and appropriate, the particular
Securities to be redeemed or any portion thereof that is an integral multiple of
$1,000.
The Securities will not have the benefit of any sinking fund.
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SECTION 11.02. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities of any series pursuant to Section 11.01
-----
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 90 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be satisfac
tory to the Trustee), notify the Trustee of such Redemption Date and of the
principal amount of Securities of the series to be redeemed.
SECTION 11.03. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of a series are to be redeemed, the particular
Securities of such series to be redeemed shall be selected not more than 90 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $1,000 or any integral multiple thereof) of the
principal amount of Securities of such series of a denomination larger than
$1,000.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities of such series selected for redemption
and, in the case of any Securities of such series selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities of any series redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities of a series
which has been or is to be redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 90 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price (or formula for calculating the same),
(3) if less than all the Outstanding Securities of such series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities of such
series to be redeemed,
68
<PAGE>
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security of such series to be redeemed
and that interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) CUSIP numbers of the Securities to be redeemed (if any).
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.05. Deposit of Redemption Price. Prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money sufficient to pay the Redemption
-----
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities of a series which are to be redeemed on
that date.
SECTION 11.06. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities of a series so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price plus accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Securities
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price together with accrued interest to the
Redemption Date; provided, however, that instalments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.07.
----
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate provided by the
Security.
SECTION 11.07. Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at an office or agency of the Company
designated for that purpose pursuant to Section 10.02 (with, if the Company or
-----
the Trustee so requires, due endorsement by, or a written instrument of transfer
in
69
<PAGE>
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without service charge, a new Security or Securities
of such series, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE 12
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.01. Company's Option to Effect Defeasance or Covenant
Defeasance. The Company may at its option by Board Resolution, at any time, in
accordance with the Exchange and Registration Rights Agreement, elect to have
either Section 12.02 or Section 12.03 applied to the Outstanding Securities of
----- -----
any series upon compliance with the conditions set forth below in this Article
12.
SECTION 12.02. Defeasance and Discharge. Upon the Company's exercise of
the option provided in Section 12.01 applicable to this Section, the Company
-----
shall be deemed to have been discharged from its obligations with respect to the
Outstanding Securities of such series on the date the conditions set forth below
are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series and to
have satisfied all its other obligations under such Securities and this Inden
ture insofar as such Securities are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same) except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Securities to receive, solely from
the trust fund described in Section 12.04 and as more fully set forth in such
-----
Section, payments in respect of the principal of (and premium, if any) and
interest on such Securities when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 3.04, 3.05, 3.06,
---- ---- ----
10.02 and 10.03, (C) the rights, powers, trusts, duties and immunities of the
- ----- -----
Trustee hereunder and (D) this Article 12. Subject to compliance with this
--
Article 12, the Company may exercise its option under this Section 12.02
-- -----
notwithstanding the prior exercise of its option under Section 12.03.
-----
SECTION 12.03. Covenant Defeasance. Upon the Company's exercise of the
option provided in Section 12.01 applicable to this Section, (i) the Company
-----
shall be released from its obligations under Sections 10.05 through 10.11,
----- -----
inclusive, and Clauses (3), (4) and (5) of Section 8.01, (ii) the occurrence of
----
an
70
<PAGE>
event specified in Sections 5.01(3) (with respect to Clauses (1), (3), (4) or
----
(5) of Section 8.01), 5.01(4) (with respect to any of Sections 10.05 through
---- -----
10.11, inclusive) and 5.01(5) shall not be deemed to be an Event of Default
- -----
shall cease to be effective on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section, Clause or Article, whether directly or indirectly by reason of
any reference elsewhere herein to any such Section, Clause or Article or by
reason of any reference in any such Section, Clause or Article to any other
provision herein or in any other document, but the remainder of this Indenture
and such Securities shall be unaffected thereby.
SECTION 12.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 12.02 or
-----
Section 12.03 to the then Outstanding Securities of such series:
-----
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.09 who shall agree to comply with the
----
provisions of this Article 12 applicable to it) as trust funds in trust
--
for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of
such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combi nation thereof, sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, the
principal of, premium, if any, and each instalment of interest on the
Securities of such series on the Stated Maturity of such principal or
instalment of interest in accordance with the terms of this Indenture
and of such Securities.
(2) In the case of an election under Section 12.02, the Company
-----
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities of such
series will not recognize gain or loss for Federal income tax purposes
as a result of such deposit, defeasance and discharge and will be
subject to Federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such deposit,
71
<PAGE>
defeasance and discharge and will be subject to Federal income tax on
the same amount manner and at the same times as would have been the
case is such deposit, defeasance and discharge had not occured.
(3) In the case of an election under Section 12.03, the Company
-----
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities of such series will not
recognize gain or loss for Federal income tax purposes as a result of
such deposit and covenant defeasance and will be subject to Federal
income tax on the same amount, in the same manner and at the same times
as would have been the case if such deposit and covenant defeasance had
not occurred.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities of such series, if then
listed on any securities exchange, will not be delisted as a result of
such deposit.
(5) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Section 6.08 and
----
for purposes of the Trust Indenture Act with respect to any securities
of the Company.
(6) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default shall have occurred and
be continuing.
(7) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
12.02 or the covenant defeasance under Section 12.03 (as the case may
----- -----
be) have been complied with.
(9) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as
defined in the Investment Company Act of 1940, as amended, or such
trust shall be qualified under such act or exempt from regulation
thereunder.
SECTION 12.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 10.03, all money and U.S. Government Obligations
-----
(including the proceeds thereof) deposited with the Trustee (or other qualifying
72
<PAGE>
trustee--collectively, for purposes of this Section 12.05, the "Trustee")
-----
pursuant to Section 12.04 in respect of the Securities of a series shall be held
-----
in trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities, of all sums due and to
become due thereon in respect of principal (and premium, if any) and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 12.04 or the principal and interest received in
-----
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities of such series.
Anything in this Article 12 to the contrary notwithstanding, the
--
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 12.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
SECTION 12.06. Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 12.02 or 12.03 by reason of
----- -----
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities of such series shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article 12 until such time as the Trustee or Paying Agent is permitted to apply
--
all such money in accordance with Section 12.02 or 12.03; provided, however,
----- -----
that if the Company makes any payment of principal of (and premium, if any) or
interest on any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Security to
receive such payment from the money held by the Trustee or the Paying Agent.
-----------------------------
73
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
RITE AID CORPORATION
By:------------------------
Name:
Title:
Attest:
- --------------------------
HARRIS TRUST AND SAVINGS BANK
By:------------------------
Name:
Title:
Attest:
- --------------------------
<PAGE>
ANNEX A --
Form of Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to ss. 3.06(b)(i) of the Indenture)
Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
Chicago, Illinois 60603
Attn: Indenture Trust Administration
Re: [Title of Securities] of Rite Aid Corporation (the
"Securities")
Reference is made to the Indenture, dated as of December 21, 1998 (the
"Indenture"), from Rite Aid Corporation (the "Company") to Harris Trust and
Savings Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
<PAGE>
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Regulation S
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable securities laws
of the states of the United States and other jurisdictions. Accordingly, the
Owner hereby further certifies as follows:
1. Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(a) the Owner is not a distributor of the Securities, an affiliate of
the Company or any such distributor or a person acting on behalf of any
of the foregoing;
(b) the offer of the Specified Securities was not made to a person in
the United States;
(c) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and any
person acting on its behalf reasonably believed that the
Transferee was outside the United States, or
(ii) the transaction is being executed in, on or through
the facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another
designated offshore securities market and neither the Owner
nor any person acting on its behalf knows that the transaction
has been prearranged with a buyer in the United States;
(d) no directed selling efforts have been made in the United States by
or on behalf of the Owner or any affiliate thereof;
(e) if the Owner is a dealer in securities or has received a selling
concession, fee or other remuneration in respect of the Specified
Securities, and the transfer is to occur during the Restricted Period,
then the requirements of Rule 904(b)(1) or (b)(3) have been satisfied;
and
(f) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
<PAGE>
2. Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144:
(a) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and is
being effected in accordance with the applicable amount, manner of sale
and notice requirements of Rule 144; or
(b) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Securities were last acquired
from the Company or from an affiliate of the Company, whichever is
later, and the Owner is not, and during the preceding three months has
not been, an affiliate of the Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: --------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this
certificate.)
By: ---------------------------
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the Undersigned
must be stated.)
<PAGE>
ANNEX B --
Form of Restricted Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to ss. 3.06(b)(ii) of the Indenture)
Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
Chicago, Illinois 60603
Attn: Indenture Trust Administration
Re: [Title of Securities] of Rite Aid Corporation (the
"Securities")
Reference is made to the Indenture, dated as of December 21, 1998 (the
"Indenture"), from Rite Aid Corporation (the "Company"), to Harris Trust and
Savings Bank, as Trustee. Terms used herein and defined in the Indenture or in
Rule 144A or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
ISIN No(s), If any. ____________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global security they are registered in the name of the Undersigned, as or on
behalf of the Owner.
<PAGE>
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, (i) the Owner is not a U.S. Person (as
defined in the Indenture) and (ii) such transfer is being effected in accordance
with Rule 144A or Rule 144 under the Securities Act and all applicable
securities laws of the states of the United States and other jurisdictions.
Accordingly, the Owner hereby further certifies as:
1. Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(a) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(b) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner
may be relying on Rule 144A in connection with the transfer; and
2. Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144:
(a) the transfer is occurring after a holding period of at
least one year (computed in accordance with paragraph (d) of Rule 144)
has elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and is
being effected in accordance with the applicable amount, manner of sale
and notice requirements of Rule 144; or
(b) the transfer is occurring after a holding period of at
least two years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:
___________________________________
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this
certificate.)
By:________________________________
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the
person signing on behalf of the
Undersigned must be stated.)
<PAGE>
ANNEX C --
Form of Unrestricted Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to ss. 3.06(c))
Harris Trust and Savings Bank
311 West Monroe Street, 12th Floor
Chicago, Illinois 60603
Attn: Indenture Trust Administration
Re: [Title of Securities] of Rite Aid Corporation (the
"Securities")
Reference is made to the Indenture, dated as of December 21, 1998 (the
"Indenture"), from Rite Aid Corporation (the "Company"), to Harris Trust and
Savings Bank, as Trustee. Terms used herein and defined in the Indenture or in
Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are used
herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
<PAGE>
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Securities Act Legend pursuant to Section 3.06(c) of the
Indenture. In connection with such exchange, the Owner hereby certifies that the
exchange is occurring after a holding period of at least two years (computed in
accordance with paragraph (d) of Rule 144) has elapsed since the Specified
Securities were last acquired from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:
__________________________________
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this
certificate.)
By:_______________________________
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the Undersigned
must be stated.)
<PAGE>
EXHIBIT 4.2
RITE AID CORPORATION
$200,000,000 5 1/2% Notes due 2000
$200,000,000 6% Notes due 2005
$150,000,000 6 1/8% Notes due 2008
$150,000,000 6 7/8% Debentures due 2028
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
------------------------------------------
December 21, 1998
J.P. Morgan Securities Inc.
Salomon Smith Barney Inc.
Lehman Brothers Inc.
Nationsbanc Montgomery Securities LLC
ABN AMRO Incorporated
First Chicago Capital Markets, Inc.
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Rite Aid Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to the several Initial Purchasers listed in Schedule I to the
Purchase Agreement defined below (the "Initial Purchasers"), upon the terms and
subject to the conditions set forth in a purchase agreement dated December 16,
1998 (the "Purchase Agreement"), (i) $200,000,000 aggregate principal amount of
its 5 1/2% Notes due 2000 ("Notes due 2000"), (ii) $200,000,000 aggregate
principal amount of its 6% Notes due 2005 ("Notes due 2005"), (iii) $150,000,000
aggregate principal amount of its 6 1/8% Notes due 2008 ("Notes due 2008") and
(iv) $150,000,000 aggregate principal amount of its 6 7/8% Debentures due 2028
("Debentures" and, together with Notes due 2000, Notes due 2005 and Notes due
2008, the "Securities"). Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Purchase Agreement.
<PAGE>
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company agrees with the Initial Purchasers, for the
benefit of the holders (including the Initial Purchasers) of the Securities and
the Exchange Securities (as defined herein) (collectively, the "Holders"), as
follows:
1. Registered Exchange Offer. The Company shall (i) prepare and, not
-------------------------
later than 90 days following the date of original issuance of the Securities
(the "Issue Date"), file with the Commission a registration statement (the
"Exchange Offer Registration Statement") on an appropriate form under the
Securities Act with respect to a proposed offer to the Holders of the Securities
(the "Registered Exchange Offer") to issue and deliver to such Holders, in
exchange for the Securities of each series, a like aggregate principal amount of
debt securities of the Company (the "Exchange Securities") that are identical in
all material respects to the Securities of such series, except for the transfer
restrictions relating to the Securities of such series, (ii) use its reasonable
best efforts to cause the Exchange Offer Registration Statement to become
effective under the Securities Act no later than 180 days after the Issue Date
and the Registered Exchange Offer to be consummated no later than 210 days after
the Issue Date and (iii) keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date on which notice of the Registered Exchange Offer is mailed to the
Holders (such period being called the "Exchange Offer Registration Period").
The Exchange Securities will be issued under the same indenture (the
"Indenture") between the Company and the Trustee or such other bank or trust
company that is reasonably satisfactory to the Initial Purchasers, as trustee
(the "Trustee"), as the Securities.
Upon the effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities of the same series (assuming that
such Holder (a) is not an affiliate of the Company or an Exchanging Dealer (as
defined herein) not complying with the requirements of the next sentence, (b) is
not an Initial Purchaser holding Securities that have, or that are reasonably
likely to have, the status of an unsold allotment in an initial distribution,
(c) acquires the Exchange Securities in the ordinary course of such Holder's
business and (d) has no arrangements or understandings with any person to
participate, and is not participating, in the distribution of the Exchange
Securities) and to trade such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act and without
material restrictions under the securities laws of the several states of the
United States. The Company, the Initial Purchasers and each Exchanging Dealer
acknowledge that, pursuant to current interpretations by the Commission's staff
of Section 5 of the Securities Act, each Holder that is a broker-dealer electing
to exchange Securities, acquired for its own account as a result of market-
making activities or other trading activities, for Exchange Securities (an
"Exchanging Dealer"), is required to deliver a prospectus containing
substantially the information set forth in Annex A hereto on the cover, in Annex
B hereto in the "Exchange Offer Procedures" section and the "Purpose of the
Exchange Offer" section and in Annex C hereto in the "Plan of Distribution"
section of such prospectus in connection with a sale of any such Exchange
Securities received by such Exchanging Dealer pursuant to the Registered
Exchange Offer.
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In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days
(or longer, if required by applicable law) after the date on which notice of
the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Securities at any time prior to
the close of business, New York City time, on the last business day on which
the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are applicable
to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange Offer,
the Company shall:
(a) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(b) deliver to the Trustee for cancellation all Securities so accepted
for exchange; and
(c) cause the Trustee promptly to authenticate and deliver to each
Holder, Exchange Securities equal in principal amount to the Securities of
each series of such Holder so accepted for exchange.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the earlier of 180 days from the close
of the Registered Exchange Offer and the date on which all Exchanging Dealers
have sold all Exchange Securities held by them and (ii) the Company shall make
such prospectus and any amendment or supplement thereto available to any broker-
dealer for use in connection with any resale of any Exchange Securities for a
period of not less than 90 days after the consummation of the Registered
Exchange Offer.
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The Indenture shall provide that the Securities and the Exchange Securities
of each series shall vote and consent together on all matters as to which the
Indenture provides for voting and consent as one class and that neither the
Securities nor the Exchange Securities of a series will have the right to vote
or consent as a separate class on any matter.
Interest on each Exchange Security issued pursuant to the Registered
Exchange Offer will accrue from the last interest payment date on which interest
was paid on the Securities of the applicable series surrendered in exchange
therefor or, if no interest has been paid on the Securities of such series, from
the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate and is not
participating in the distribution of the Securities or the Exchange Securities
within the meaning of the Securities Act and (iii) such Holder is not an
affiliate of the Company or, if it is such an affiliate, such Holder will comply
with the registration and prospectus delivery requirements of the Securities Act
to the extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or applicable
------------------
interpretations thereof by the Commission's staff the Company is not permitted
to effect the Registered Exchange Offer as contemplated by Section 1 hereof, or
(ii) any Securities validly tendered and not withdrawn pursuant to the
Registered Exchange Offer are not exchanged for Exchange Securities within 210
days after the Issue Date, or (iii) in the opinion of counsel for the Initial
Purchasers, a registration statement must be filed or a prospectus must be
delivered by the Initial Purchasers in connection with any offering or sale of
Securities because such Securities represent an unsold allotment from the
original offering thereof, or (iv) any applicable law or interpretations do not
permit any Holder to participate in the Registered Exchange Offer, or (v) any
Holder that participates in the Registered Exchange Offer does not receive
freely transferable Exchange Securities in exchange for tendered Securities, or
(vi) the Company so elects, then the following provisions shall apply:
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<PAGE>
(a) The Company shall use its reasonable best efforts to file as promptly
as practicable (but in no event more than 30 days after so required or requested
pursuant to this Section 2) with the Commission, and thereafter shall use its
reasonable best efforts to cause to be declared effective, a shelf registration
statement on an appropriate form under the Securities Act relating to the offer
and sale of the Transfer Restricted Securities (as defined below) by the Holders
thereof from time to time in accordance with the methods of distribution set
forth in such registration statement (hereafter, a "Shelf Registration
Statement" and, together with any Exchange Offer Registration Statement, a
"Registration Statement").
(b) The Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
forming part thereof to be used by Holders of Transfer Restricted Securities for
a period ending on the earlier of (i) two years from the Issue Date or such
shorter period that will terminate when all the Transfer Restricted Securities
covered by the Shelf Registration Statement have been sold pursuant thereto and
(ii) the date on which the Securities become eligible for resale without volume
restrictions pursuant to Rule 144 under the Securities Act (in any such case,
such period being called the "Shelf Registration Period"). The Company shall be
deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in Holders of Transfer Restricted Securities
covered thereby not being able to offer and sell such Transfer Restricted
Securities during that period, unless such action is required by applicable law.
(c) Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Shelf Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included therein
in reliance upon or in conformity with written information furnished to the
Company by or on behalf of any Holder specifically for use therein (the
"Holders' Information")) does not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any prospectus forming part
of any Shelf Registration Statement, and any supplement to such prospectus (in
either case, other than with respect to Holders' Information), does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Additional Interest. (a) If (i) the applicable Registration
-------------------
Statement is not filed with the Commission on or prior to 90 days after the
Issue Date (or in the case of a Shelf Registration Statement required to be
filed in response to a change in law or the applicable interpretations of
Commission's staff, if later, within 30 days after publication of the change in
law or interpretation), (ii) the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, is not declared effective
within 180 days after the Issue Date (or in the case of a Shelf Registration, as
required by Section 2(a)), (iii) the Registered Exchange Offer is not
consummated
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<PAGE>
on or prior to 210 days after the Issue Date, or (iv) the Shelf Registration
Statement is filed and declared effective as required by Section 2(a) but shall
thereafter cease to be effective (at any time that the Company is obligated to
maintain the effectiveness thereof) without being again effective within 30 days
or being succeeded within 30 days by an additional Registration Statement filed
and declared effective (each such event referred to in clauses (i) through (iv),
a "Registration Default"), the Company will be obligated to pay additional
interest ("Additional Interest") to each Holder of Transfer Restricted
Securities, during the period of one or more such Registration Defaults, at a
rate of 0.50% per annum on the applicable principal amount of Transfer
Restricted Securities of each series held by such Holder until (i) the
applicable Registration Statement is filed, (ii) the Exchange Offer Registration
Statement is declared effective and the Registered Exchange Offer is consummated
with respect to all properly tendered Securities, (iii) the Shelf Registration
Statement is declared effective or (iv) the Shelf Registration Statement again
becomes effective (or is superseded by another effective Shelf Registration
Statement), as the case may be. Following the cure of all Registration Defaults,
the accrual of Additional Interest will cease. As used herein, the term
"Transfer Restricted Securities" means (i) each Security of a series until the
date on which such Security has been exchanged for a freely transferable
Exchange Security in the Registered Exchange Offer, (ii) each Security of a
series until the date on which it has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (iii) each Security of a series until the date on which it is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act. Notwithstanding
anything to the contrary in this Section 3(a), the Company shall not be required
to pay Additional Interest to a Holder of Transfer Restricted Securities if such
Holder failed to comply with its obligations to make the representations set
forth in the second to last paragraph of Section 1 or failed to provide the
information required to be provided by it, if any, pursuant to Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent under the
Indenture immediately upon the happening of each and every Registration Default.
The Company shall pay the Additional Interest due on the Transfer Restricted
Securities by depositing with the Paying Agent (which may not be the Company for
these purposes), in trust, for the benefit of the Holders thereof, prior to
10:00 a.m., New York City time, on the next applicable interest payment date
specified by the Indenture and the Securities of each series, sums sufficient to
pay the Additional Interest then due. The Additional Interest due shall be
payable on each applicable interest payment date specified by the Indenture and
the Securities of each series to the record holder entitled to receive the
interest payment to be made on such date. Each obligation to pay Additional
Interest shall be deemed to accrue from and including the date of the applicable
Registration Default.
(c) The parties hereto agree that the Additional Interest provided for in
this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be
6
<PAGE>
declared effective and the Registered Exchange Offer to be consummated, in each
case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
-----------------------
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Registration Statement and
each amendment thereof and each supplement, if any, to the prospectus included
therein and shall use its reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments as any Initial
Purchaser may reasonably propose; (ii) include the information set forth in
Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in Annex
C hereto in the "Plan of Distribution" section of the prospectus forming a part
of the Exchange Offer Registration Statement, and include the information set
forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and (iii) if requested by any Initial Purchaser,
include the information required by Items 507 or 508 of Regulation S-K, as
applicable, in the prospectus forming a part of the Exchange Offer Registration
Statement.
(b) The Company shall advise each Initial Purchaser, each Exchanging
Dealer and the Holders (if applicable) and, if requested by any such person,
confirm such advice in writing (which advice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto has
been filed with the Commission and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to
any Registration Statement or the prospectus included therein or for
additional information;
(iii) if known by the Company, of the issuance by the Commission of any
stop order suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Securities or the Exchange
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and
(v) of the happening of any event that requires the making of any
changes in any Registration Statement or the prospectus included therein in
order that the statements therein are not misleading and do not omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
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<PAGE>
(c) The Company will make every reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(d) The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one conformed copy of such Shelf Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules and, if any such Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference).
(e) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of such prospectus
or any amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(f) The Company will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).
(g) The Company will, during the Exchange Offer Registration Period or
the Shelf Registration Period, as applicable, promptly deliver to each Initial
Purchaser, each Exchanging Dealer and such other persons that are required to
deliver a prospectus following the Registered Exchange Offer, without charge, as
many copies of the final prospectus included in the Exchange Offer Registration
Statement or the Shelf Registration Statement and any amendment or supplement
thereto as such Initial Purchaser, Exchanging Dealer or other persons may
reasonably request; and the Company consents to the use of such prospectus or
any amendment or supplement thereto by any such Initial Purchaser, Exchanging
Dealer or other persons, as applicable, as aforesaid.
(h) Prior to the effective date of any Registration Statement, the
Company will use its reasonable best efforts to register or qualify, or
cooperate with the Holders of Securities, Exchange Securities included therein
and their respective counsel in connection with the registration or
qualification of, such Securities or Exchange Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as any such Holder
reasonably requests in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Securities or Exchange Securities covered by such Registration Statement;
provided that the Company will not be required to qualify generally to do
business in any jurisdiction where it is
8
<PAGE>
not then so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not then
so subject.
(i) The Company will cooperate with the Holders of Securities or Exchange
Securities to facilitate the timely preparation and delivery of certificates
representing Securities, Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as the Holders thereof may request in writing prior
to sales of Securities or Exchange Securities pursuant to such Registration
Statement.
(j) If any event contemplated by Section 4(b)(ii) through (v) occurs
during the period for which the Company is required to maintain an effective
Registration Statement, the Company will promptly prepare and file with the
Commission a post-effective amendment to the Registration Statement or a
supplement to the related prospectus or file any other required document so
that, as thereafter delivered to purchasers of the Securities or Exchange
Securities from a Holder, the prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for each series of the
Securities and each series of the Exchange Securities as the case may be, and
provide the applicable trustee with printed certificates for each series of the
Securities or each series of the Exchange Securities as the case may be, in a
form eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all applicable rules and regulations of
the Commission and will make generally available to its security holders as soon
as practicable after the effective date of the applicable Registration Statement
an earning statement satisfying the provisions of Section 11(a) of the
Securities Act; provided that in no event shall such earning statement be
delivered later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the applicable
Registration Statement, which statement shall cover such 12-month period.
(m) The Company will cause the Indenture, to be qualified under the Trust
Indenture Act as required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted Securities
to be registered pursuant to any Shelf Registration Statement to furnish to the
Company such information concerning the Holder and the distribution of such
Transfer Restricted Securities as the Company may from time to time reasonably
require for inclusion in such Shelf Registration Statement, and the Company may
exclude from such registration the Transfer Restricted Securities of any Holder
that fails to furnish such information within a reasonable time after receiving
such request.
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<PAGE>
(o) In the case of a Shelf Registration Statement, each Holder of Transfer
Restricted Securities to be registered pursuant thereto agrees by acquisition of
such Transfer Restricted Securities that, upon receipt of any notice from the
Company pursuant to Section 4(b)(ii) through (v), such Holder will discontinue
disposition of such Transfer Restricted Securities until such Holder's receipt
of copies of the supplemental or amended prospectus contemplated by Section 4(j)
or until advised in writing (the "Advice") by the Company that the use of the
applicable prospectus may be resumed. If the Company shall give any notice
under Section 4(b)(ii) through (v) during the period that the Company is
required to maintain an effective Registration Statement (the "Effectiveness
Period"), such Effectiveness Period shall be extended by the number of days
during such period from and including the date of the giving of such notice to
and including the date when each seller of Transfer Restricted Securities
covered by such Registration Statement shall have received (x) the copies of the
supplemental or amended prospectus contemplated by Section 4(j) (if an amended
or supplemental prospectus is required) or (y) the Advice (if no amended or
supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the Company shall enter
into such customary agreements (including, if requested, an underwriting
agreement in customary form) and take all such other action, if any, as Holders
of a majority in aggregate principal amount of the Securities or Exchange
Securities being sold or the managing underwriters (if any) shall reasonably
request in order to facilitate any disposition of Securities or Exchange
Securities pursuant to such Shelf Registration Statement.
(q) In the case of a Shelf Registration Statement, the Company shall (i)
make reasonably available for inspection by a representative of, and Special
Counsel (as defined below) acting for, Holders of a majority in aggregate
principal amount of the Securities and Exchange Securities being sold and any
underwriter participating in any disposition of Securities or Exchange
Securities pursuant to such Shelf Registration Statement, all relevant financial
and other records, pertinent corporate documents and properties of the Company
and its subsidiaries and (ii) use its reasonable best efforts to have its
officers, directors, employees, accountants and counsel supply all relevant
information reasonably requested by such representative, Special Counsel or any
such underwriter (an "Inspector") in connection with such Shelf Registration
Statement.
(r) In the case of a Shelf Registration Statement, the Company shall, if
requested by Holders of a majority in aggregate principal amount of the
Securities and Exchange Securities being sold, their Special Counsel or the
managing underwriters (if any) in connection with such Shelf Registration
Statement, use its reasonable best efforts to cause (i) its counsel (which may
be the Company's general counsel) to deliver an opinion relating to the Shelf
Registration Statement and the Securities or Exchange Securities, as applicable,
in customary form, (ii) its officers to execute and deliver all customary
documents and certificates requested by Holders of a majority in aggregate
principal amount of the Securities and Exchange Securities being sold, their
Special Counsel or the managing underwriters (if any) and (iii) its independent
public accountants to provide a comfort letter or letters in customary form,
subject to receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.
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5. Registration Expenses. The Company will bear all expenses incurred in
---------------------
connection with the performance of its obligations under Sections 1, 2, 3 and 4
and, in the case of a Shelf Registration Statement, the Company will reimburse
the Initial Purchasers and the Holders for the reasonable fees and disbursements
of one firm of attorneys (in addition to any local counsel) chosen by the
Holders of a majority in aggregate principal amount of the Securities and the
Exchange Securities to be sold pursuant to each Registration Statement (the
"Special Counsel") acting for the Initial Purchasers or Holders in connection
therewith.
6. Indemnification. (a) In the event of a Shelf Registration Statement
---------------
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, the Company shall indemnify and hold harmless each Holder
(including, without limitation, any such Initial Purchaser or Exchanging
Dealer), its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder) from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of Securities or Exchange
Securities), to which that Holder may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
any such Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse each Holder promptly
upon demand for any legal or other expenses reasonably incurred by that Holder
in connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with any
Holders' Information; and provided, further, that with respect to any such
untrue statement in or omission from any related preliminary prospectus, the
indemnity agreement contained in this Section 6(a) shall not inure to the
benefit of any Holder from whom the person asserting any such loss, claim,
damage, liability or action received Securities or Exchange Securities to the
extent that such loss, claim, damage, liability or action of or with respect to
such Holder results from the fact that both (A) a copy of the final prospectus
was not sent or given to such person at or prior to the written confirmation of
the sale of such Securities or Exchange Securities to such person and (B) the
untrue statement in or omission from the related preliminary prospectus was
corrected in the final prospectus unless, in either case, such failure to
deliver the final prospectus was a result of non-compliance by the Company with
Section 4(d), 4(e), 4(f) or 4(g).
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(b) In the event of a Shelf Registration Statement, each Holder shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6(b) and
Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Holders' Information furnished to
the Company by such Holder, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no such Holder
shall be liable for any indemnity claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Securities or Exchange
Securities pursuant to such Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 6(a) or 6(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 6 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 6. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the
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<PAGE>
indemnified party has reasonably concluded (based upon advice of counsel to the
indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 6(a) and 6(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability or claims
that were raised or could have been raised by such plaintiff in such proceeding.
7. Contribution. If the indemnification provided for in Section 6 is
------------
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company from the offering and sale of the Securities,
on the one hand, and a Holder with respect to the sale by such Holder of
Securities or Exchange Securities, on the other, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and such Holder on the other with respect to the statements or omissions
that resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and a Holder on the other with
respect to such offering and such sale shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities (before
deducting expenses) received by or on behalf of the Company as set forth in the
table on the cover of the Offering Memorandum, on the one hand, bear to the
total proceeds received by such Holder with
13
<PAGE>
respect to its sale of Securities or Exchange Securities, on the other. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to the Company or information
supplied by the Company on the one hand or to any Holders' Information supplied
by such Holder on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 7 were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 7
shall be deemed to include, for purposes of this Section 7, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 7, an indemnifying party that is
a Holder of Securities or Exchange Securities shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Securities or Exchange Securities sold by such indemnifying party to any
purchaser exceeds the amount of any damages which such indemnifying party has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. Rules 144 and 144A. So long as Transfer Restricted Securities
------------------
remain outstanding, the Company shall use its reasonable best efforts to file
the reports required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time the Company is not required to file
such reports, it will, upon the written request of any Holder of Transfer
Restricted Securities, make publicly available other information so long as
necessary to permit sales of such Holder's securities pursuant to Rules 144 and
144A. So long as Transfer Restricted Securities remain outstanding, the Company
covenants that it will take such further action as any Holder of Transfer
Restricted Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including, without limitation, the
requirements of Rule 144A(d)(4)). So long as Transfer Restricted Securities
remain outstanding, upon the written request of any Holder of Transfer
Restricted Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements. Notwithstanding
the foregoing, nothing in this Section 8 shall be deemed to require the Company
to register any of its securities pursuant to the Exchange Act.
9. Underwritten Registrations. If any of the Transfer Restricted
--------------------------
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably
14
<PAGE>
withheld or delayed), and such Holders shall be responsible for all underwriting
commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
------------- ----------------------
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities and the Exchange Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders whose Securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by Holders of a
majority in aggregate principal amount of the Securities and the Exchange
Securities being sold by such Holders pursuant to such Registration Statement.
(b) Notices. All notices and other communications provided for or
--------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such Holder to
the Company in accordance with the provisions of this Section 10(b), which
address initially is, with respect to each Holder, the address of such
Holder maintained by the Registrar under the Indenture, with a copy in like
manner to the Initial Purchasers;
(2) if to an Initial Purchaser, initially at its address set forth in
the Purchase Agreement; and
(3) if to the Company, initially at the address of the Company set forth
in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding upon the
----------------------
Company and its successors and assigns.
15
<PAGE>
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts (which may be delivered in original form or by telecopier) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Definition of Terms. For purposes of this Agreement, (a) the term
-------------------
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York.
(h) Remedies. In the event of a breach by the Company or by any Holder of
--------
any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law, including recovery of damages (other than the recovery of damages for a
breach by the Company of its obligations under Sections 1 or 2 hereof for which
Additional Interest has been paid pursuant to Section 3 hereof), will be
entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agree that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. The Company represents, warrants and
--------------------------
agrees that (i) it has not entered into, shall not, on or after the date of this
Agreement, enter into any agreement that is inconsistent with the rights granted
to the Holders in this Agreement or otherwise conflicts with the provisions
hereof, (ii) it has not previously entered into any agreement granting any
registration rights with respect to any of its debt securities to any person,
except for such agreements where the Company has complied and is in compliance
with its registration obligations to date, and (iii) without limiting the
generality of the foregoing, so long as Transfer Restricted Securities remain
outstanding, without the written consent of the Holders of a majority in
aggregate principal amount of the then outstanding Transfer Restricted
Securities, it shall not grant to any person the right to request the Company to
register any debt securities of the Company under the Securities Act unless the
rights so granted are not in conflict or inconsistent with the provisions of
this Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any of its
-----------------------------
security holders (other than the Holders of Transfer Restricted Securities in
such capacity) shall have the right
16
<PAGE>
to include any securities of the Company in any Shelf Registration or Registered
Exchange Offer other than Transfer Restricted Securities.
(k) Severability. The remedies provided herein are cumulative and not
------------
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
17
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the Initial Purchasers.
Very truly yours,
RITE AID CORPORATION
By
------------------------------
Name:
Title:
Accepted:
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
LEHMAN BROTHERS INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
ABN AMRO INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
By: J.P. Morgan Securities Inc.
By
----------------------------
Name:
Title:
<PAGE>
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".
<PAGE>
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Securities, where such Securities were acquired by such broker-
dealer as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until _______________, 199__,
all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers
for their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
<PAGE>
ANNEX D
o CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE>
EXHIBIT 5
March 19, 1999
Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011-2404
Re: Registration Statement on Form S-4 relating to the Exchange
Offer respecting Notes and Debentures in the aggregate
principle amount of $700,000,000
--------------------------------------------------
Ladies and Gentlemen:
As special counsel to Rite Aid Corporation, a Delaware corporation
(the "Company"), we are rendering this opinion as to the legality of the
$700,000,000 aggregate principal amount of the Company's Debentures and Notes
(the "Securities") to be registered pursuant to the above-captioned Registration
Statement on Form S-4 (the "Registration Statement") filed on the date hereof by
the Company with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations promulgated thereunder (the "Rules"). Except as otherwise
defined herein, capitalized terms are used as defined in the Registration
Statement.
In connection herewith, we have examined originals or copies of (i) the
Registration Statement, (ii) the Indenture, dated as of December 21, 1998 (the
"Indenture"), between the Company and Harris Trust and Savings Bank, as trustee
(the "Trustee"), (iii) the Restated Certificate of Incorporation and By-laws of
the Company, as amended to date, and (iv) records of certain corporate
proceedings of the Company relating to, among other things, the Securities. In
addition, we have made such other examinations of law and fact as we considered
necessary in order to form a basis for the opinion hereinafter expressed.
In our examination of the aforesaid documents, we have assumed, without
independent investigation, the genuineness of all signatures, the legal capacity
of all individuals who have
<PAGE>
Rite Aid Corporation
March 19, 1999
Page 2
executed any of the documents, the authenticity of all documents submitted to us
as originals, the conformity to the original documents of all documents
submitted to us as certified, photostatic, reproduced or conformed copies and
the authenticity of all such documents.
In rendering the opinion set forth below, we have also assumed that (i)
the Registration Statement, and any amendments thereto, will have become
effective, (ii) all Securities will have been issued in compliance with
applicable federal and states securities laws, (iii) the Trustee is validly
existing with all requisite power and authority to enter into the Indenture and
perform its obligations thereunder, (iv) the Indenture has been duly executed
and delivered by the Trustee and the Indenture will have become qualified under
the Trust Indenture Act of 1939, as amended, and (v) the Securities will have
been duly executed by the Company, authenticated by the Trustee, and issued and
delivered against receipt of the consideration therefor approved by the Company,
in each case as provided in the Indenture.
Based upon and subject to the forgoing, we are of the opinion that the
Securities, when so issued and delivered, will constitute legal, valid and
binding obligations of the Company and will be entitled to the benefits of the
Indenture (subject to applicable bankruptcy, insolvency, reorganization,
receivership, arrangement, fraudulent conveyance, moratorium or other similar
laws affecting creditors' rights generally and general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Our opinion expressed above is limited to the laws of the State of New
York and the General Corporation Law of the State of Delaware.
We hereby consent to the use of our name in the Registration Statement,
in the related prospectus as the same appears under the caption "Legal Matters"
and in any supplement to such prospectus, and to the use of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT 12
RITE AID CORPORATION AND SUBSIDIARIES
STATEMENTS RE COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
THIRTY-NINE WEEKS ENDED NOVEMBER 28, 1998 AND
YEARS ENDED FEBRUARY 28, 1998, MARCH 1, 1997, MARCH 2, 1996, MARCH 4, 1995, AND
FEBRUARY 26, 1994
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
Thirty-nine
Weeks Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
November 28, Feb. 28, March 1, March 2, March 4, Feb. 26,
1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges
Interest Expense $ 128,155 $ 159,752 $ 96,473 $ 68,341 $ 42,300 $ 28,683
Interest Portion(1)
of Net Rental
Expense 102,300 111,943 66,067 52,080 40,424 40,427
--------- --------- --------- --------- --------- ---------
Fixed Charges Before
Capitalized Interest 230,455 271,695 162,540 120,421 82,724 69,110
Capitalized Interest 6,020 3,834 1,897 1,948 373 217
--------- --------- --------- --------- --------- ---------
Total Fixed Charges $ 236,475 $ 275,529 $ 164,437 $ 122,369 $ 83,097 $ 69,327
========= ========= ========= ========= ========= =========
Earnings
Income Before
Extraordinary Loss
and Income Taxes $ 141,735 $ 530,041 $ 258,927 $ 256,202 $ 231,464 $ 45,670
Fixed Charges Before
Capitalized Interest 230,455 271,695 162,540 120,421 82,724 69,110
--------- --------- --------- --------- --------- ---------
Total Adjusted
Earnings $ 372,190 $ 801,736 $ 421,467 $ 376,623 $ 314,188 $ 114,780
========= ========= ========= ========= ========= =========
Ratio of Earnings to
Fixed Charges 1.57 2.91 2.56 3.08 3.78 1.66
========= ========= ========= ========= ========= =========
</TABLE>
(1) The interest portion of the net rental expense is estimated to be equal to
one-third of the minimum rental expense for the period.
<PAGE>
EXHIBIT 15
----------
Rite Aid Corporation
Camp Hill, Pennsylvania
Gentlemen:
Re: Registration Statement of Rite Aid Corporation on Form S-4
With respect to the subject registration statement, we acknowledge our awareness
of the use therein of our reports dated June 30, 1998, October 12, 1998, and
January 12, 1999 related to our reviews of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are not
considered part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of sections 7 and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
March 18, 1999
<PAGE>
EXHIBIT 23.2
------------
Consent of Independent Certified Public Accountants
The Board of Directors
Rite Aid Corporation
We consent to the use of our audit reports dated April 14, 1998 on the
consolidated financial statements of Rite Aid Corporation and subsidiaries as of
February 28, 1998 and March 1, 1997, and for each of the years in the three-year
period ended February 28, 1998, and the related financial statement schedule,
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
March 18, 1999
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Daniel G. Donovan, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
(312) 461-2908 phone (312) 461-3525 facsimile
(Name, address and telephone number for agent for service)
RITE AID CORPORATION
(Obligor)
Delaware 23-1614034
(State of Incorporation) (I.R.S. Employer Identification No.)
30 Hunter Lane
Camp Hill, Pennsylvania 17011
(Address of principal executive offices)
5 1/2% Notes, Due 2000
6% Notes, Due 2005
6 1/8% Notes, Due 2008
6 7/8% Debentures, Due 2028
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Commercial Federal Corporation, File
No. 333-20711, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 15th day of March, 1999.
HARRIS TRUST AND SAVINGS BANK
By: /s/ DGDonovan
-------------
D. G. Donovan
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ DGDonovan
-------------
D. G. Donovan
Assistant Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of December 31, 1998, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO] HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on December 31, 1998, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin..................... $ 1,435,233
Interest bearing balances............................................... $ 98,929
Securities:....................................................................
a. Held-to-maturity securities $ 0
b. Available-for-sale securities $ 5,295,498
Federal funds sold and securities purchased under agreements to resell $ 151,575
Loans and lease financing receivables:
Loans and leases, net of unearned income................................ $ 9,320,939
LESS: Allowance for loan and lease losses.............................. $ 108,280
--------------------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b).................................................... $ 9,212,659
Assets held in trading accounts................................................ $ 252,881
Premises and fixed assets (including capitalized leases)....................... $ 271,540
Other real estate owned........................................................ $ 366
Investments in unconsolidated subsidiaries and associated companies............ $ 57
Customer's liability to this bank on acceptances outstanding................... $ 30,829
Intangible assets.............................................................. $ 257,627
Other assets................................................................... $ 1,093,599
-------------------------
TOTAL ASSETS $18,100,793
=========================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices.......................................................... $10,270,499
Non-interest bearing.................................................... $3,410,568
Interest bearing........................................................ $6,859,931
In foreign offices, Edge and Agreement subsidiaries, and IBF's............... $ 935,609
Non-interest bearing.................................................... $ 69,215
Interest bearing........................................................ $ 866,394
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and
in IBF's:
Federal funds purchased & securities sold under agreements to repurchase....... $ 3,642,049
Trading Liabilities 131,909
Other borrowed money:..........................................................
a. With remaining maturity of one year or less $ 1,107,125
b. With remaining maturity of more than one year $ 0
Bank's liability on acceptances executed and outstanding $ 30,829
Subordinated notes and debentures.............................................. $ 225,000
Other liabilities.............................................................. $ 424,376
-------------------------
TOTAL LIABILITIES $16,767,396
=========================
EQUITY CAPITAL
Common stock................................................................... $ 100,000
Surplus........................................................................ $ 608,116
a. Undivided profits and capital reserves..................................... $ 593,973
b. Net unrealized holding gains (losses) on available-for-sale securities $ 31,308
-------------------------
TOTAL EQUITY CAPITAL $ 1,333,397
=========================
Total liabilities, limited-life preferred stock, and equity capital............ $18,100,793
=========================
</TABLE>
I, Pamela Piarowski, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
PAMELA PIAROWSKI
1/27/99
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
RICHARD E. TERRY
Directors.
4
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE ALL OUTSTANDING 5 1/2% NOTES DUE 2000,
6% NOTES DUE 2005, 6 1/8% NOTES DUE 2008 AND 6 7/8% DEBENTURES DUE 2028
("RESTRICTED SECURITIES") FOR 5 1/2% NOTES DUE 2000, 6% NOTES DUE 2005, 6 1/8%
NOTES DUE 2008 AND 6 7/8% DEBENTURES DUE 2028
("EXCHANGE SECURITIES") OF RITE AID CORPORATION
- --------------------------------------------------------------------------------
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
HARRIS TRUST AND SAVINGS BANK
<TABLE>
<C> <S> <C>
Facsimile Transmission Number: By Hand/Overnight Delivery: By Registered or Certified Mail:
- -------------------------------- ------------------------------- --------------------------------
(For Eligible Institutions Only) Harris Trust and Savings Bank Harris Trust and Savings Bank
(212) 701-7636 c/o Harris Trust Company c/o Harris Trust Company
of New York of New York
88 Pine Street P.O. Box 1010
For General Information 19th Floor Wall Street Station
----------------------- New York, NY 10005 New York, NY 10268-1010
and to
------
Confirm Receipt of Facsimile by
- -------------------------------
Telephone:
----------
(212) 701-7624
</TABLE>
(Originals of all documents sent by facsimile should be sent
promptly by registered or certified mail, by hand or by overnight courier)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY OF THIS LETTER OF TRANSMITTAL. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE SECURITIES FOR THEIR
RESTRICTED SECURITIES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND
NOT WITHDRAW) THEIR RESTRICTED SECURITIES TO THE EXCHANGE AGENT PRIOR TO THE
EXPIRATION DATE.
The undersigned acknowledges receipt of the prospectus dated _______, 1999
(the "Prospectus") of Rite Aid Corporation, a Delaware corporation (the
"Company"), and this Letter of Transmittal (this "Letter"), which together
constitute the Company's offer (the "Exchange Offer") to exchange an aggregate
principal amount of up to $700,000,000 of its 5 1/2% Notes Due 2000, 6% Notes
Due 2005, 6 1/8% Notes Due 2008 and 6 7/8% Notes Due 2028 (the "Exchange
Securities") which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for an identical principal amount of its 5 1/2%
Notes Due 2000, 6% Notes Due 2005, 6 1/8% Notes Due 2008 and 6 7/8% Notes Due
2028 (the "Restricted Securities", and together with the Exchange Securities,
the "Securities") outstanding on the date hereof. Capitalized terms used but not
defined herein have the meanings given to them in the Prospectus.
For each Restricted Securities accepted for exchange and not validly
withdrawn, the holder of such Restricted Securities will receive an Exchange
Securities having a principal amount equal to that of the surrendered Restricted
Securities. Restricted Securities accepted for exchange will cease to accrue
interest from and after the date of consummation of the Exchange Offer. Holders
of Restricted Securities whose Restricted Securities are accepted for exchange
will not receive any payment in respect of
<PAGE>
interest on such Restricted Securities otherwise payable on any interest payment
date the record date for which occurs on or after consummation of the Exchange
Offer. Interest on the Exchange Securities will accrue from the last interest
payment date on which interest was paid on the Restricted Securities surrendered
in exchange therefor or, if no interest has been paid on the Restricted
Securities, from the date of original issue of the Restricted Securities. The
Company expressly reserves the right, at any time or from time to time, to
extend the Exchange Offer at its discretion, in which event the term "Expiration
Date" shall mean the latest time and date to which the Exchange Offer is
extended. The Company shall notify the holders of the Restricted Securities of
any extension by means of a press release or other public announcement prior to
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
This Letter is to be used by a holder of Restricted Securities if: (i)
tender of Restricted Securities is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in the
Prospectus under "The Exchange Offer -- Book Entry Transfer" by any financial
institution that is a participant in the Book-Entry Transfer Facility and whose
name appears on a security position listing as the owner of Restricted
Securities or (ii) tender of Restricted Securities is to be made according to
the guaranteed delivery procedures set forth in the Prospectus under "The
Exchange Offer--Guaranteed Delivery Procedures." DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "holder" with respect to the Exchange Offer means any person whose
Restricted Securities are held of record by the Book-Entry Transfer Facility who
desires to deliver such Restricted Securities by book-entry transfer at the
Book-Entry Transfer Facility. The undersigned has completed, executed and
delivered this Letter of Transmittal to indicate the action the undersigned
desires to take with respect to the Exchange Offer.
Questions and requests for assistance or for additional copies of the
Prospectus, this Letter and the Notice of Guaranteed Delivery may be directed to
the Exchange Agent. See Instruction 8 herein.
Listed below are the Restricted Securities to which this Letter relates.
<PAGE>
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR
RESTRICTED Securities MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX BELOW
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
DESCRIPTION OF RESTRICTED Securities
- -----------------------------------------------------------------------------------------------------------------
1 2 3
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name(s) and Address(es) of
Registered Holder(s) Aggregate Principal Principal Amount
(Please fill in, if blank) Amount of Restricted Drs. Tendered*
- -----------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
Total Total
- -----------------------------------------------------------------------------------------------------------------
* Unless otherwise indicated in this column, any tendering holder of Restricted
Securities will be deemed to have tendered ALL of the Restricted Securities
indicated in column 2. If the space provided above is inadequate, the
principal amount of Restricted Securities should be listed on a separate
signed schedule affixed hereto. Restricted Securities tendered hereby must be
in denominations of principal amount of $1,000 and any integral multiple
thereof. See Instruction 1.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- ---------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
To be completed ONLY if Exchange Securities are to be registered in the name of
someone other than the undersigned or if Restricted Securities which are not
tendered or not accepted for exchange are to be credited to an account
maintained by the Book-Entry Transfer Facility other than the account indicated
above.
Register Exchange Securities and/or Restricted Securities in the
name of:
Name_____________________________________________________
(PLEASE PRINT)
Address__________________________________________________
_________________________________________________________
(INCLUDE ZIP CODE)
_________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
- ---------------------------------------------------------
<PAGE>
[ ] CHECK HERE IF TENDERED RESTRICTED SECURITIES. ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:____________________________________________
Transfer Facility Book-Entry Account No.:_________________________________
Transaction Code No.:_____________________________________________________
[ ] CHECK HERE IF TENDERED RESTRICTED DRS. ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):__________________________________________
Window Ticket Number (if any):____________________________________________
Date of Execution of Notice of Guaranteed Delivery:_______________________
Account Number: _________________ Transaction Code Number:_______________
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:_____________________________________________________________________
Address:__________________________________________________________________
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Restricted Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a Prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
Prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE>
Ladies and Gentlemen:
Subject to the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Restricted Securities indicated above. Subject to, and effective upon, the
acceptance for exchange of the Restricted Securities tendered in accordance with
this Letter, the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Company, all right, title and interest in and to such Restricted
Securities tendered hereby. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge
that the Exchange Agent also acts as the agent of the Company and as Trustee
under the Indenture for the Restricted Securities and Exchange Securities) with
respect to the tendered Restricted Securities with full power of substitution to
(i) transfer ownership of such Restricted Securities on the account books
maintained by the Book-Entry Transfer Facility and deliver all accompanying
evidence of transfer and authenticity to, or upon the order of, the Company and
(ii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Restricted Securities, all in accordance with the terms and
subject to the conditions of the Exchange Offer. The power of attorney granted
in this paragraph shall be deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Restricted
Securities tendered hereby and that the Company will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that (i) any Exchange
Securities acquired in exchange for Restricted Securities tendered hereby will
have been acquired in the ordinary course of business of the person receiving
such Exchange Securities, whether or not such person is the holder, (ii) neither
the holder of such Restricted Securities nor any such other person has an
arrangement or understanding with any person to participate in the distribution
of such Exchange Securities, (iii) if the holder of Restricted Securities is not
a broker-dealer, or is a broker-dealer but will not receive Exchange Securities
for its own account in exchange for Restricted Securities, neither the holder
nor any such other person is engaged in or intends to engage in the distribution
of such Exchange Securities and (iv) neither the holder of such Restricted
Securities nor any such other person is an "affiliate," as defined in Rule 405
under the Securities Act, of the Company.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the Exchange Securities issued in exchange for the Restricted
Securities pursuant to the Exchange Offer may be offered for resale, resold and
otherwise transferred by holders thereof (other than any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Securities are
acquired in the ordinary course of such holders' business and such holders have
no arrangement with any person to participate in the distribution of such
Exchange Securities. However, the Company does not intend to request the SEC to
consider, and the SEC has not considered the Exchange Offer in the context of a
no-action letter and there can be no assurance that the staff of the SEC would
make a similar determination with respect to the Exchange Offer as in other
circumstances. If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Securities. If any holder is an affiliate of the
Company, is engaged in or intends to engage in or has any arrangement or
understanding with respect to the distribution of the Exchange Securities to be
acquired pursuant to the Exchange Offer, such holder (i) could not rely on the
applicable interpretations of the staff of the SEC and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction and that such a resale transaction must
be covered by an effective registration statement containing the selling
security holder information required by the applicable regulation. If the
undersigned is a broker-dealer that will receive Exchange Securities for its own
account in exchange for Restricted Securities, that were acquired by it as a
result of market-making activities or other trading activities, it acknowledges
that it will deliver a prospectus in connection with any resale of such Exchange
Securities; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that its is an "underwriter" within the
meaning of the Securities Act.
<PAGE>
The undersigned will, upon request, execute and deliver any additional
documents reasonably deemed by the Exchange Agent or the Company to be necessary
or desirable to complete the assignment, transfer and purchase of the Restricted
Securities tendered hereby. All authority conferred or agreed to be conferred in
this Letter shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned hereunder shall be binding
upon the undersigned's heirs, personal representatives, successors and assigns,
trustees in bankruptcy or other legal representatives of the undersigned. This
tender may be withdrawn only in accordance with the procedures set forth under
the caption "The Exchange Offer -- Withdrawal Rights" in the Prospectus.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted properly tendered Restricted Securities for exchange when, as and if
the Company has given oral or written notice thereof to the Exchange Agent with
written confirmation of any oral notice to be given promptly thereafter.
The undersigned understands that tenders of Restricted Securities pursuant to
the procedures described under the caption "The Exchange Offer--Procedures for
Tendering Restricted Securities" in the Prospectus and in the instructions
hereto will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue and register the Exchange Securities issued in exchange for the Restricted
Securities accepted for exchange and register any Restricted Securities not
tendered or not exchanged in the name(s) of the undersigned by credit to the
undersigned's account at the Book-Entry Transfer Facility. In the event that the
"Special Issuance Instructions" are completed, please issue and register the
Exchange Securities issued in exchange for the Restricted Securities accepted
for exchange, and register any Restricted Securities not tendered or not
exchanged, in the name(s) of the person(s) so indicated by credit to such
person's account at the Book-Entry Transfer Facility. The undersigned recognizes
that the Company has no obligation pursuant to the "Special Issuance
Instructions" to transfer any Restricted Securities from the name of the
registered Holder(s) thereof if the Company does not accept for exchange any of
the Restricted Securities so tendered.
Holders of Restricted Securities who are unable to deliver their confirmation
of the book-entry tender of their Restricted Securities into the Exchange
Agent's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation") and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their Restricted
Securities according to the guaranteed delivery procedures set forth in the
Prospectus under "The Exchange Offer --Guaranteed Delivery Procedures." See
Instruction 1.
<PAGE>
PLEASE SIGN HERE WHETHER OR NOT
RESTRICTED SECURITIES ARE BEING TENDERED HEREBY
X______________________________________ _______________________
DATE
X______________________________________ _______________________
SIGNATURE(S) OF REGISTERED HOLDER(S) DATE
OR AUTHORIZED SIGNATORY
Area Code and Telephone Number:___________________
The above lines must be signed by the registered holder(s) of Restricted
Securities as their name(s) appear(s) as such on a security position listing as
the owner of Restricted Securities, or by person(s) authorized to become
registered holder(s). If Restricted Securities to which this Letter of
Transmittal relates are held of record by two or more joint holders, then all
such holders must sign this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person must
(i) set forth his or her full title below and (ii) unless waived by the Company,
submit evidence satisfactory to the Company of such person's authority as to
act. See Instruction 3 regarding the completion of this Letter of Transmittal.
Name(s):________________________________________________________________________
(PLEASE PRINT)
Capacity:_______________________________________________________________________
Address:________________________________________________________________________
(INCLUDE ZIP CODE)
Signature(s) Guaranteed by an Eligible Institution (as defined):
(If required by Instruction 3)
_______________________________________________________________________________
(AUTHORIZED SIGNATURE)
_______________________________________________________________________________
(TITLE)
_______________________________________________________________________________
(NAME OF FIRM)
_______________________________________________________________________________
(ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE) OF
FIRM)
Date:_______________________________, 1999
_______________________________________________________________________________
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the
Exchange Offer
1. DELIVERY OF THIS LETTER AND Securities; GUARANTEED DELIVERY PROCEDURES.
This Letter is to be completed by holders (which term, for purposes of the
Exchange Offer means any participant in the Book-Entry Transfer Facility system
whose name appears on a security position listing as the holder of such
Restricted Securities) if tenders are to be made pursuant to the procedures for
delivery by book-entry transfer set forth in the Prospectus under the caption
"The Exchange Offer -- Book-Entry Transfer." A Book-Entry Confirmation, as well
as this properly completed and duly executed Letter (or manually signed
facsimile hereof) and any other documents required by this Letter, must be
received by the Exchange Agent at the address set forth herein on or prior to
5:00 p.m., New York City time, on the Expiration Date, or the tendering holder
must comply with the guaranteed delivery procedures set forth below. Restricted
Securities tendered hereby must be in denominations of principal amount of
$1,000 and any integral multiple thereof.
If a registered holder of the Restricted Securities desires to tender such
Restricted Securities and time will not permit such holder's Letter of
Transmittal or other required documents to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected if (i) the tender is made through an
Eligible Institution, (ii) prior to the Expiration Date, the Exchange Agent
receives from such Eligible Institution a properly competed and duly executed
Letter of Transmittal (or a facsimile thereof) and Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by telegram, telex,
facsimile and transmission, mail or hand delivery), setting forth the name and
address of the holder of Restricted Securities and the amount of Restricted
Securities tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange ("NYSE") trading days
after the date of execution of the Notice of Guaranteed Delivery, a Book-Entry
Confirmation and all other documents required by the Letter of Transmittal will
be deposited by the Eligible Institution with the Exchange Agent and (iii) a
Book-Entry Confirmation and all other documents required by the Letter of
Transmittal are received by the Exchange Agent within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Restricted Securities and all
other required documents is at the election and risk of the tendering holders,
and the delivery will be deemed made only when actually received or confirmed by
the Exchange Agent. If Restricted Securities are sent by mail, it is suggested
that the mailing be made sufficiently in advance of the Expiration Date to
permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on
the Expiration Date.
2. SIGNATURES ON THIS LETTER; GUARANTEE OF SIGNATURES.
If any tendered Restricted Securities are owned of record by two or more
joint owners, all such owners must sign this Letter.
If this Letter or powers of attorney are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority to so act must be submitted.
In the event that signatures on this Letter are required to be guaranteed,
such guarantees must be by a firm that is a member or participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program, or by an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Exchange Act (collectively, "Eligible Institutions").
<PAGE>
Signatures on this Letter need not be guaranteed by an Eligible
Institution, provided the Restricted Securities are tendered: (i) by a
registered holder of Restricted Securities who has not completed the box
entitled "Special Issuance Instructions" on this Letter; or (ii) for the account
of an Eligible Institution.
3. SPECIAL ISSUANCE AND REGISTRATION INSTRUCTIONS.
Tendering holders of Restricted Securities may request that Restricted
Securities not exchanged be credited to an account maintained at the Book-Entry
Transfer Facility designated by such holder hereon. If no such instructions are
given, such Restricted Securities not exchanged will be returned to the name of
the person signing this Letter.
4. TAX IDENTIFICATION NUMBER.
United States federal income tax law may require that a tendering holder
whose Restricted Securities are accepted for exchange provide the Company (as
payor) with such holder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below, which in the case of a tendering holder who is an
individual, is his or her social security number. If the Company is not provided
with the current TIN or an adequate basis for an exemption, such tendering
holder may be subject to a $50 penalty imposed by the United States Internal
Revenue Service (the "IRS"). In addition, such tendering holder may be subject
to backup withholding tax in an amount equal to 31% of all reportable payments
made after the exchange. If such withholding results in an overpayment of taxes,
a refund may be obtained.
Exempt holders of Restricted Securities (including, among others, all
corporations) are not subject to these backup withholding requirements. See the
enclosed Guidelines For Certification of Taxpayer Identification Number on
Substitute Form W-9 (the "Guidelines") for additional instructions.
To prevent backup withholding tax, each tendering holder of Restricted
Securities should provide its correct TIN by completing the Substitute Form W-9
set forth below, certifying that the TIN provided is correct. If the tendering
holder of Restricted Securities is a nonresident alien or foreign entity not
subject to backup withholding tax, such holder should provide a completed Form
W-8, Certificate of Foreign Status. These forms may be obtained from the
Exchange Agent. If the Restricted Securities are held in more than one name or
are not held in the name of the actual owner, such holder should consult the
Guidelines for information on which TIN to report.
5. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Exchange Securities in exchange for Restricted Securities pursuant to the
Exchange Offer. If, however, Exchange Securities or Restricted Securities not
tendered or not accepted are to be registered in the name of any person other
than the registered holder of the Restricted Securities tendered hereby, or if
tendered Restricted Securities are registered in the name of any person other
than the person signing this Letter, or if a transfer tax is imposed for any
reason other than the transfer of Restricted Securities to the Company or its
order pursuant to the Exchange Offer, the amount of any such transfer taxes
(whether imposed on the registered holder or any other person) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted herewith, the amount of such transfer taxes
will be billed directly to such tendering holder.
Except as provided in this Instruction 5, it will not be necessary for
transfer tax stamps to be affixed to the Restricted Securities specified in this
letter.
<PAGE>
6. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
7. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Restricted Securities, by execution of this
Letter, shall waive any right to receive notice of the acceptance of their
Restricted Securities for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of
Restricted Securities, nor shall any of them incur any liability for failure to
give any such notice.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, may be directed to the
Exchange Agent, at the address and telephone number indicated above.
<PAGE>
- --------------------------------------------------------------------------------
Name (if joint names, list first and circle the name of the person or entity
whose number you enter below)
- --------------------------------------------------------------------------------
Business Name (Sole proprietors see the instructions in the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 (the
"Guidelines"))
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City, State and Zip Code
- --------------------------------------------------------------------------------
PART I - TAXPAYER IDENTIFICATION NUMBER
Enter your taxpayer identification number in
the appropriate box. For individuals, this is
your social security number. For sole
SUBSTITUTE FORM W-9 proprietors, see the instructions in the
Department of the Treasury Guidelines. For other entities, it is your
Internal Revenue Service employer identification number. If you do not
have a number, see "Obtaining a Number" in
Request for Taxpayer the Guidelines.
Identification Number and
Certification Note: If the account is in more than one
- --------------------------------- name, see the chart on page 1 of the
Guidelines on whose number to enter.
----------------------------------
Social Security Number
----------------------------------
OR
----------------------------------
Employer Identification Number
----------------------------------
--------------------------------------------
PART II - FOR PAYEES EXEMPT FROM BACKUP
WITHHOLDING (SEE INSTRUCTIONS IN THE
GUIDELINES)
- -------------------------------------------------------------------------------
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding or (b) I have not been notified by the Internal Revenue Service
("IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am
no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return.
SIGNATURE:------------------------------------ DATE:-------------, 1999
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF CERTAIN PAYMENTS MADE TO YOU. PLEASE REVIEW THE GUIDELINES FOR
ADDITIONAL DETAILS.
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Rite Aid Corporation (the "Company") made pursuant to the
Prospectus, dated _____, 1999 (the "Prospectus"), if the procedure for book-
entry transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Company prior to 5:00 p.m., New York City time,
on the Expiration Date of the Exchange Offer. This form may be delivered or
transmitted by facsimile transmission, mail or hand delivery to Harris Trust and
Savings Bank (the "Exchange Agent") as set forth below. In addition, in order to
utilize the guaranteed delivery procedure to tender Restricted Securities
pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal (or facsimile thereof) must also be received by the Exchange Agent
prior to 5:00 p.m., New York City time, on the Expiration Date. Capitalized
terms used but not defined herein have the meanings given to them in the
Prospectus.
Delivery To: HARRIS TRUST AND SAVINGS BANK, EXCHANGE AGENT
<TABLE>
<S> <C> <C>
Facsimile Transmission Number: By Hand/Overnight Delivery By Registered or Certified Mail:
- ------------------------------ -------------------------- --------------------------------
(For Eligible Institutions Only) Harris Trust and Savings Bank Harris Trust and Savings Bank
(212) 701-7636 c/o Harris Trust Company c/o Harris Trust Company
of New York of New York
For General Information 88 Pine Street P.O. Box 1010
----------------------- 19th Floor Wall Street Station
and to New York, NY 10268-1010 New York, NY 10005
------
Confirm Receipt of Facsimile by
-------------------------------
Telephone:
----------
(212) 701-7624
</TABLE>
(Originals of all documents sent by facsimile should be sent
promptly by registered or certified mail, by hand or by overnight courier)
Delivery of this instrument to an address other than as set forth above, or
transmission of instructions via facsimile other than as set forth above, will
not constitute a valid delivery.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Restricted Securities set forth below, pursuant
to the guaranteed delivery procedure described in "The Exchange Offer--
Guaranteed Delivery Procedures" section of the Prospectus.
<PAGE>
Principal Amount of Outstanding Securities. Tendered:/*/
$--------------------------------------------------
Provide account number for Restricted Securities
to be delivered by book-entry transfer to
the Depository Trust Company.
Account Number ------------------------------------
- -------------------------
/*/Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE DEATH
OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
PLEASE SIGN HERE
X_______________________________________________________________________________
X_______________________________________________________________________________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:
Must be signed by the holder(s) of Restricted Securities. as their name(s)
appear(s) on a security position listing or by person(s) authorized to become
registered holder(s) by documents transmitted with this Notice of Guaranteed
Delivery. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or the person acting in a fiduciary or representative
capacity, such person must set forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):________________________________________________________________________
Capacity:_______________________________________________________________________
Address(es):____________________________________________________________________
__________________________________________________________________________
<PAGE>
GUARANTEE
The undersigned, a member or participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program, on an "eligible guarantor institution"
within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, hereby guarantees that timely confirmation of the book-entry transfer
of such Restricted Securities into the Exchange Agent's account at the
Depository Trust Company pursuant to the procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus, together with
a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) with any required signature guarantee and any other
documents required by the Letter of Transmittal, will be received by the
Exchange Agent at the address set forth above, no later than three business days
after the date of the delivery hereof.
Name of Firm:-----------------------------------------------------------------
Authorized Signature:---------------------------------------------------------
Title:------------------------------------------------------------------------
Name:-------------------------------------------------------------------------
Address:----------------------------------------------------------------------
(Please Type or Print)
Area Code and Tel. No.--------------------------------------------------------
Dated:------------------------------------------------------------------------
