Exhibit 10.3

 

EXECUTION VERSION

 

June 28, 2017

 

Fred’s, Inc.

4300 New Getwell Road

Memphis, Tennessee 38118

Attn:  General Counsel

 

AFAE, LLC

c/o Fred’s, Inc.

4300 New Getwell Road

Memphis, Tennessee 38118

Attn:  General Counsel

 

Re:  Asset Purchase Agreement (the “Agreement”), dated as of December 19, 2016,
by and among Rite Aid Corporation, a Delaware corporation (“RAD”), Walgreens
Boots Alliance, Inc., a Delaware corporation (“Parent”) (solely for the purposes
set forth therein), AFAE, LLC, a Delaware limited liability company and
Fred’s, Inc., a Tennessee corporation (solely for the purposes set forth
therein) (together with its affiliates, “Fred’s”)

 

Ladies and Gentlemen:

 

Reference is hereby made to Section 8.01(g) of the Agreement and the fact that
as of the date hereof, that certain Agreement and Plan of Merger, dated as of
October 27, 2015, among Parent, RAD and the other parties thereto (as amended)
was terminated on June 28, 2017 in accordance with its terms.  Pursuant to
Section 8.01(g) of the Agreement, Parent hereby terminates the Agreement
effective immediately.  For the avoidance of doubt, the letter agreement, dated
June 13, 2017, by and among RAD, Parent, AFAE, LLC and Fred’s (the “Expense
Reimbursement Letter”) shall remain in full force and effect without any
amendment or other modification thereto.  Capitalized terms used but not defined
herein have the respective meanings given to them in the Agreement.

 

Without prejudice to Parent’s termination of the Agreement pursuant to the
foregoing paragraph (which shall be effective regardless of whether this letter
agreement is acknowledged or agreed to by any other party), and contingent upon
the mutual execution of this letter agreement by Parent, RAD and Fred’s, for
good and valuable consideration (the sufficiency of which is hereby
acknowledged), it is acknowledged and agreed by the parties that (a) from
June 13, 2017 until the date of this letter agreement, each of Parent, RAD and
Fred’s has performed each of the obligations, and complied with each of the
agreements and covenants, required to be performed by it, or complied with by
it, under Section 5.05 of the Agreement, (b) each of Parent and RAD, together
with their respective successors and past and present subsidiaries, affiliates,
assignees, officers, directors, employees, controlling persons, representatives,
agents, attorneys, auditors, stockholders, equity holders and advisors, and any
family member, spouse, heir, trust, trustee, executor, estate, administrator,
beneficiary, foundation, fiduciary, predecessors, successors and assigns of each
of them, hereby forever fully and irrevocably releases and discharges Fred’s
(including its successors and past and present subsidiaries, affiliates,
assignees, officers, directors, employees, controlling persons, representatives,
agents, attorneys, auditors, stockholders, equity holders and advisors, and any
family member, spouse, heir, trust, trustee, executor, estate, administrator,
beneficiary, foundation, fiduciary, predecessors, successors and assigns of each
of them), to the fullest extent permitted by law from any and all Actions,
Liabilities and Losses, howsoever arising, of every kind

 

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and nature, whether based on any law or right of action (including any claims
under federal securities laws or state disclosure law or any claims that could
be asserted derivatively on behalf of Parent or RAD), known or unknown, asserted
or that could have been asserted, matured or unmatured, contingent or fixed,
liquidated or unliquidated, accrued or unaccrued, foreseen or unforeseen,
apparent or not apparent, which Parent, RAD or any of their respective
affiliates or equityholders has or may hereafter have against Fred’s in
connection with the Agreement and any ancillary agreements thereto (except, for
the avoidance of doubt, the Expense Reimbursement Agreement) or the transactions
contemplated therein and thereby, including any breach, non-performance, action
or failure to act under the Agreement, the events leading to the termination of
the Agreement and any ancillary agreements thereto (except, for the avoidance of
doubt, the Expense Reimbursement Agreement), any deliberations or negotiations
in connection with the proposed transaction or this letter agreement,
(c) Fred’s, together with its successors and past and present subsidiaries,
affiliates, assignees, officers, directors, employees, controlling persons,
representatives, agents, attorneys, auditors, stockholders, equity holders and
advisors, and any family member, spouse, heir, trust, trustee, executor, estate,
administrator, beneficiary, foundation, fiduciary, predecessors, successors and
assigns of each of them, hereby forever fully and irrevocably releases and
discharges each of Parent and RAD (including their respective successors and
past and present subsidiaries, affiliates, assignees, officers, directors,
employees, controlling persons, representatives, agents, attorneys, auditors,
stockholders, equity holders and advisors, and any family member, spouse, heir,
trust, trustee, executor, estate, administrator, beneficiary, foundation,
fiduciary, predecessors, successors and assigns of each of them), to the fullest
extent permitted by law from any and all Actions, Liabilities and Losses,
howsoever arising, of every kind and nature, whether based on any law or right
of action (including any claims under federal securities laws or state
disclosure law or any claims that could be asserted derivatively on behalf of
Fred’s), known or unknown, asserted or that could have been asserted, matured or
unmatured, contingent or fixed, liquidated or unliquidated, accrued or
unaccrued, foreseen or unforeseen, apparent or not apparent, which Fred’s or its
affiliates or its equityholders has or may hereafter have against Parent, RAD or
any of their respective affiliates in connection with the Agreement and any
ancillary agreements thereto (except, for the avoidance of doubt, the Expense
Reimbursement Agreement) or the transactions contemplated therein and thereby,
including any breach, non-performance, action or failure to act under the
Agreement, the events leading to the termination of the Agreement and any
ancillary agreements thereto (except, for the avoidance of doubt, the Expense
Reimbursement Agreement), any deliberations or negotiations in connection with
the proposed transaction or this letter agreement, and (d) each of Parent and
RAD, on the one hand, and Fred’s, on the other hand, hereby irrevocably agrees
to refrain from directly or indirectly asserting any claim or demand or
commencing (or causing to be commenced) any Action in connection with such
Liabilities and Losses.  Each of Parent and RAD, on the one hand, and Fred’s, on
the other hand, agrees that, from and after the date hereof, it shall not (and
shall cause its affiliates and representatives (to the extent acting on its
behalf) not to), directly or indirectly, libel, slander, disparage or otherwise
make (or cause to be made) to any person any disparaging, derogatory or other
negative or false statement regarding, Fred’s, on the one hand, or Parent, RAD
or their respective affiliates, on the other hand, respectively, in any manner
that could reasonably be expected to be harmful to such person, its affiliates
or to the business or business reputation of such person.

 

Without the prior written consent of the other parties, none of the parties
hereto will disclose to any person (other than to its affiliates and to its or
its affiliates’ directors, officers, employees, advisors or attorneys) this
letter agreement or the contents hereof except as otherwise required by

 

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law or applicable legal process (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process) or the
rules of any applicable securities exchange.  Each of the parties hereto
acknowledges and agrees that nothing herein shall be deemed to require such
party to file this letter agreement with the United States Securities and
Exchange Commission or any other governmental authority.  This letter agreement
and any controversies arising with respect hereto shall be governed by and
construed under the laws of the State of Delaware without giving effect to any
principle or law that would require application of the law of another
jurisdiction.  Each party hereby consents to the exclusive jurisdiction of the
Court of Chancery of the State of Delaware or, to the extent such court declines
jurisdiction, first to any federal court, or second, to any state court, each
located in Wilmington, Delaware, and hereby waive the right to assert the lack
of personal or subject matter jurisdiction or improper venue, in connection with
any such suit, action or other proceeding.  EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS LETTER AGREEMENT.  No modification of this letter agreement or
waiver of the terms and conditions hereof shall be binding upon any party hereto
unless approved in writing by each such party. This letter agreement may be
executed in counterparts (including by facsimile or .pdf), each of which shall
be deemed to be an original, but all of which together shall constitute one
agreement.

 

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Very truly yours,

 

 

 

 

 

 

 

 

Walgreens Boots Alliance, Inc.

 

 

 

 

 

 

 

 

By:

/s/ Mark E. Vainisi

 

 

Name:

Mark E. Vainisi

 

 

Title:

SVP, M&A - WBA

 

 

 

 

 

 

ACCEPTED AND AGREED TO AS OF JUNE 28, 2017:

 

 

(for purposes of the last two paragraphs of this letter agreement)

 

 

 

 

 

Rite Aid Corporation

 

 

 

 

 

 

 

 

By:

/s/ James J. Comitale

 

 

 

Name: James J. Comitale

 

 

 

Title: Senior Vice President, General Counsel

 

 

 

 

 

 

 

 

Fred’s, Inc.

 

 

 

 

 

 

 

 

By:

/s/ Michael K. Bloom

 

 

 

Name: Michael K. Bloom

 

 

 

Title: President & CEO

 

 

 

 

 

 

 

 

 

 

AFAE, LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michael K. Bloom

 

 

 

Name: Michael K. Bloom

 

 

 

Title: CEO

 

 

 

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cc:

 

Rite Aid Corporation

30 Hunter Lane

Camp Hill, PA 17011

Attn: James J. Comitale

 

Sidley Austin LLP

One South Dearborn Street

Chicago, IL 60603

Attn: Chris Abbinante; Scott R. Williams

 

Skadden, Arps, Slate, Meagher & Flom LLP

4 Times Square

New York, NY 10036

Attention: Paul T. Schnell; Marie L. Gibson

 

Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C.

First Tennessee Building

165 Madison Ave.

Suite 2000

Memphis, TN 38103

Attn: Sam Chafetz; Drew Yonchak

 

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