Document:

EXECUTION COPY

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

by and between

 

Rite Aid Corporation

 

and

 

The Jean Coutu Group (PJC) Inc.

___________________

 

Dated as of August 23, 2006

 

 

 

 

 

 

 

TABLE OF CONTENTS

	
            1.
 	
            DEMAND REGISTRATIONS.
 	
            1
 
	
            2.
 	
            PIGGYBACK REGISTRATIONS.
 	
            5
 
	
            3.
 	
            OTHER REGISTRATIONS.
 	
            7
 
	
            4.
 	
            SELECTION OF UNDERWRITERS.
 	
            7
 
	
            5.
 	
            HOLDBACK AGREEMENTS.
 	
            7
 
	
            6.
 	
            PROCEDURES.
 	
            7
 
	
            7.
 	
            REGISTRATION EXPENSES.
 	
            12
 
	
            8.
 	
            INDEMNIFICATION.
 	
            12
 
	
            9.
 	
            RULE 144.
 	
            14
 
	
            10.
 	
            TRANSFER OF REGISTRATION RIGHTS.
 	
            15
 
	
            11.
 	
            MISCELLANEOUS.
 	
            15
 
	
            12.
 	
            STOCKHOLDER PRO RATA DISTRIBUTION.
 	
            19
 
	
            13.
 	
            EFFECTIVENESS.
 	
            20
 
				

 

 

i

 

 

Index of Defined Terms

 

	
            5% Spinoff Coutu Stockholder
 	
            19
 
	
            Additional Preemptive Securities Purchase
 	
            4
 
	
            Affiliate
 	
            1
 
	
            Agreement
 	
            1
 
	
            Beneficial Ownership
 	
            19
 
	
            Blackout Period
 	
            12
 
	
            Business Day
 	
            7
 
	
            Closing
 	
            7
 
	
            Company
 	
            1
 
	
            control
 	
            1
 
	
            controlled by
 	
            1
 
	
            Coutu Stockholder
 	
            20
 
	
            Demand Registration
 	
            1
 
	
            Demand Registration Statement
 	
            2
 
	
            Exchange Act
 	
            8
 
	
            Family Member
 	
            20
 
	
            Green
 	
            6
 
	
            Group
 	
            20
 
	
            Investor
 	
            1
 
	
            Lender
 	
            15
 
	
            LGP Registration Rights Agreement
 	
            7
 
	
            Liabilities
 	
            12
 
	
            Liability
 	
            12
 
	
            Person
 	
            1
 
	
            Piggyback Registration
 	
            5
 
	
            Piggyback Registration Statement
 	
            5
 
	
            Preemptive Securities
 	
            4
 
	
            Prospectus
 	
            4
 
	
            Registrable Securities
 	
            4
 
	
            Registration Expenses
 	
            12
 
	
            Registration Statement
 	
            4
 
	
            Representative
 	
            8
 
	
            Rite Aid Common Stock
 	
            4
 
	
            Rule 144
 	
            5
 
	
            SEC
 	
            5
 
	
            Securities Act
 	
            5
 
	
            Stock Consideration
 	
            5
 
	
            Stock Purchase Agreement
 	
            5
 
	
            Stockholder Agreement
 	
            5
 
	
            Stockholder Pro Rata Distribution
 	
            19
 
	
            Suspension Notice
 	
            11
 
			

 

 

ii

 

 

 

	
            Total Voting Power
 	
            20
 
	
            under common control with
 	
            1
 
			

underwritten registration or underwritten offering                                          
                                                           5

 

iii

 

 

 

REGISTRATION RIGHTS AGREEMENT dated as of August 23, 2006, by and between Rite Aid Corporation, a Delaware corporation (the “Company”, which term includes any other Person (as defined below) referred to in the second sentence of Section 11(c) hereof), and The Jean Coutu Group (PJC) Inc., a Québec corporation (the “Investor”, which term includes any 100% owned (directly or indirectly) Affiliates (as defined below), Lenders hereby permitted by Section 10 of this Agreement and each 5% Spinoff Coutu Stockholder (as defined in Section 12(a))).

“Affiliate” means with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person; “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or any other means.

“Agreement” means this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Registration Rights Agreement as the same may be in effect at the time such reference becomes operative.

“Person” means any individual, corporation, limited liability company, limited or general partnership, association, joint-stock company, trust, unincorporated organization, other entity, or government or any agency or political subdivision thereof.

In consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

	
            1.
 	
            Demand Registrations.
 

(a)          Right to Request Registration. At any time after the Company files with the SEC (as defined in Section 1(n) below) its Annual Report on Form 10-K for its fiscal year ended March 3, 2007, the Investor (including a Lender permitted by Section 10 of this Agreement, a 5% Spinoff Coutu Stockholder, or a combination thereof) may, by written notice to the Company, request an underwritten registration (as defined in Section 1(s) below) under the Securities Act (as defined in Section 1(o) below) of all or part of the Registrable Securities (as defined in Section 1(k) below); provided that either (A) the reasonably anticipated aggregate offering price to the public of such public offering, net of underwriting discounts and
commissions, would exceed $100 million or (B) the underwritten registration is for shares representing at least 25% of the Registrable Securities outstanding at that time (a «Demand Registration«).

(b)          Demand Registration Statement. The Company shall use its reasonable best efforts to file, as soon as reasonably practicable, after the Company’s receipt of any request for a Demand Registration, in its sole discretion, either (i) a shelf registration statement on Form S-3 or such other form under the Securities Act then available to the Company, registering for resale 

 

 

 

such number of shares of Registrable Securities as the Investor(s) have requested to be included in the Demand Registration and have such shelf registration statement declared effective as soon as reasonably practicable after receiving a request for a Demand Registration, or (ii) a prospectus supplement covering such number of shares of Registrable Securities as requested by the Investor(s) to be included in the Demand Registration; provided, in the case of clause (ii), that the Company has previously filed and there remains effective a shelf registration statement on Form S-3 or any successor form thereto then available to the Company that permits the Demand Registration without the filing of a new registration statement. Such registration statement referred to in clause (i) and (ii) above (including the Prospectus (as defined in Section 1(j) below), amendments
and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement) is hereinafter referred to as a “Demand Registration Statement.” 

(c)          Number of Demand Registrations. The Investor(s) shall be entitled to request an aggregate of six Demand Registrations pursuant to Section 1(a) hereof. A registration shall not count as one of the six permitted Demand Registrations (i) until (A) the related Demand Registration Statement has become effective by the SEC in the case of Section 1(b)(i) above, or (B) the filing of the prospectus supplement contemplated in the case of Section 1(b)(ii) above, and (ii) unless the Demand Registration Statement remains effective for the periods set forth in Section 1(f) herein. The Company will not be obligated to effect a Demand Registration more than once in any six-month period. For the avoidance of doubt, the Company shall not be obligated to effect more than six Demand
Registrations, whether such Demand Registrations are requested by the original Investor, Lenders permitted by Section 10 of this Agreement, one or more 5% Spinoff Coutu Stockholders, or a combination thereof.

(d)          Priority on Demand Registrations. The Company and other holders of equity securities of the Company shall have the right to participate in and include any equity securities of the Company in any Demand Registration, subject to the priority provisions set forth in this Section 1(d). If the managing underwriter of any Demand Registration shall advise the Company that in its reasonable opinion the number of equity securities requested to be included in such Demand Registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such equity securities can be sold, then the Company shall include in such Demand Registration the maximum number of shares of equity securities that such
underwriter or agent, as applicable, advises can be so sold without having such adverse effect, allocated (i) first, to Registrable Securities requested by the Investor(s) to be included in such Demand Registration allocated among such requesting Investor(s) on a pro rata basis or in such other manner as they may agree, and (ii) second, among all shares of equity securities of the Company requested to be included in such Demand Registration by any other Persons (including securities to be sold for the account of the Company) allocated among such Persons on a pro rata basis or in such manner as they may agree.

(e)          Restrictions on Demand Registrations. The Company may postpone the filing or the effectiveness of a Demand Registration Statement, including any prospectus supplement contemplated in the case of Section 1(b)(ii) above, for a reasonable length of time, not to exceed 100 days in any 12-month period; provided, however, that such period may be extended up to 

 

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180 days in any 12-month period if the Company’s directors and executive officers are restricted from selling the Company’s securities during such additional period (other than pursuant to a preexisting 10b5-1 plan) (i) if, based on the good faith judgment of the Company’s Board of Directors, such postponement is necessary in order to avoid premature disclosure of a matter the Company’s Board of Directors has determined would not be in the best interest of the Company to be disclosed at such time, (ii) if the Company cannot obtain, after using its reasonable best efforts, financial information (or information used to prepare such information) from any third party necessary for inclusion in such Demand Registration Statement, including any prospectus supplement contemplated in the case of Section 1(b)(ii) above, or (iii) would materially interfere with a material financing, merger, sale or
acquisition of assets, recapitalization or other similar corporate action of the Company that is pending or expected by the Company to occur or be announced during the delay period; provided, however, that the Investor(s) requesting such Demand Registration Statement, including any prospectus supplement contemplated in the case of Section 1(b)(ii) above, shall be entitled, at any time after receiving notice of such postponement and before such Demand Registration Statement becomes effective, or the filing of the prospectus supplement in the case of Section 1(b)(ii) above, to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the permitted Demand Registrations. The Company shall provide notice to the requesting Investor(s) of (i) any postponement of the filing or effectiveness of a Demand Registration Statement, including any prospectus
supplement contemplated in the case of Section 1(b)(ii) above, pursuant to this Section 1(e), (ii) the Company’s decision to file or seek effectiveness of such Demand Registration Statement, including any prospectus supplement contemplated in the case of Section 1(b)(ii) above, following such postponement and (iii) the effectiveness of such Demand Registration Statement, or the filing of a prospectus supplement in the case of Section 1(b)(ii) above, following such postponement. The Company may defer the filing or effectiveness of a Demand Registration Statement, including any prospectus supplement contemplated in the case of Section 1(b)(ii) hereof, pursuant to this Section 1(e) no more than two times in any 12-month period. In addition, the Company shall not be obligated to effect, or to take any action to effect, any Demand Registration pursuant to this Section 1 during the period starting with the date 60 days prior to the Company’s good faith estimate of the date of
filing of, and ending six months after the effective date of, a registration statement subject to Section 2 hereof; provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective.

(f)           Effective Period of Demand Registrations. After any Demand Registration filed pursuant to this Agreement has become effective or a prospectus supplement contemplated in the case of Section 1(b)(ii) hereof has been filed, the Company shall use its reasonable best efforts to keep such Demand Registration Statement continuously effective for a period of at least 90 days from the date on which the SEC declares such Demand Registration Statement effective in the case of Section 1(b)(i) or from the date of filing of the prospectus supplement contemplated in the case of Section 1(b)(ii) hereof, as applicable (plus the duration of any Blackout Period (as defined in Section 6 below)), or such shorter period that shall terminate when all of the Registrable Securities
covered by such Demand Registration Statement have been sold pursuant to such Demand Registration Statement in accordance with the plan of distribution set forth therein.

 

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(g)          “Additional Preemptive Securities Purchase” has the meaning set forth in Section 1.3 of the Stockholder Agreement.

(h)          “Rite Aid Common Stock” means the shares of common stock, par value $1.00 per share, of the Company.

(i)           “Preemptive Securities” has the meaning set forth in Section 1.3 of the Stockholder Agreement.

(j)           “Prospectus” means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

(k)          “Registrable Securities” means (i) any shares of Rite Aid Common Stock issued as Stock Consideration, (ii) any Preemptive Securities purchased by the Investor pursuant to an Additional Preemptive Securities Purchase that were not issued pursuant to an effective registration statement or are not subject to another registration rights agreement, (iii) any Rite Aid Common Stock purchased by the Investor pursuant to Section 1.4 of the Stockholder Agreement and (iv) any other security into or for which the Rite Aid Common Stock or the Preemptive Securities referred to in clause (i), (ii) or (iii) has been converted, substituted or exchanged, and any security issued or issuable with respect thereto, in each case, upon any Company stock
dividend or stock split or in connection with a Company combination of shares, reclassification, recapitalization, merger, consolidation or other reorganization.

As to any Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement registering such Registrable Securities under the Securities Act has been declared or becomes effective and such shares of Registrable Securities have been sold or otherwise transferred by the holder thereof pursuant to such effective registration statement, (ii) such Registrable Securities are sold pursuant to Rule 144 under circumstances in which any legend borne by such shares of Registrable Securities relating to restrictions on the transferability thereof, under the Securities Act or otherwise, is removed by the Company, (iii) such Registrable Securities are eligible to be sold pursuant to paragraph (k) of Rule 144, (iv) such Registrable Securities shall cease to be outstanding, or (v) such Registrable Securities are transferred to any (a) Person that is not a
100% owned (directly or indirectly) Affiliate of the Investor or such Person ceases to be a 100% owned (directly or indirectly) Affiliate of the Investor or a Person, (b) Person that is not a permissible transferee pursuant to this Agreement, or (c) Person in a Stockholder Pro Rata Distribution that is not a 5% Spinoff Coutu Stockholder or such Person ceases to be a 5% Spinoff Coutu Stockholder.

(l)                         “Registration Statement” means any registration statement of the Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

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(m)                       “Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such rule.

	
            (n)
 	
            “SEC” means the Securities and Exchange Commission.
 

(o)                        “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC from time to time thereunder.

(p)                        “Stock Consideration” means the shares of Rite Aid Common Stock issued to the Investor pursuant to the Stock Purchase Agreement.

(q)                        “Stockholder Agreement” means that certain Stockholder Agreement dated as of the date hereof, between the Company, the Investor and certain other persons.

(r)                         “Stock Purchase Agreement” means that certain Stock Purchase Agreement, dated as of the date hereof, between the Company and the Investor.

(s)                         “underwritten registration or underwritten offering” means an offering in which securities of the Company are sold to one or more underwriters (as defined in Section 2(a)(ii) of the Securities Act) for resale to the public. For clarity purposes, an underwritten registration shall not include the filing of a registration statement to offer securities on a delayed or continuous basis pursuant to Rule 415 (or any successor rule) pursuant to the Securities Act.

	
            2.
 	
            Piggyback Registrations.
 

(a)          Right to Piggyback. At any time after the Closing (as defined in Section 2(f) below), whenever the Company proposes to publicly sell in an underwritten offering (as defined in Section 1(s)) or register for sale any of its equity securities in an underwritten registration (as defined in Section 1(s)) pursuant to a registration statement (a ‘Piggyback Registration Statement”) under the Securities Act (other than a registration statement on Form S-8 or Form S-4, or, in each case, pursuant to any similar successor forms thereto), whether for its own account or for the account of one or more securityholders of the Company (a “Piggyback Registration”), the
Company shall give written notice to the Investor at least ten Business Days (or if such notice period is not practicable under the circumstances, the Company shall use reasonable best efforts to provide the maximum prior written notice as is reasonably practicable under the circumstances) prior to the initial filing of such Piggyback Registration Statement or the date of the commencement of any such offering of its intention to effect such sale or registration and, subject to Sections 2(b) and 2(c) hereof, shall include in such Piggyback Registration Statement all Registrable Securities of the same class of the securities that are being registered and that are the subject of the offering with respect to which the Company has received a written request from the Investor for inclusion therein within five Business Days (as defined in Section 2(e) below) after the date of the Company’s notice (or such shorter period if the Company provides less than 6 Business Days notice
as described in the parenthetical above). The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion, without prejudice to the Investor’s right to immediately request a Demand Registration hereunder. The Investor’s right to participate in any Piggyback Registration shall be conditioned on the Investor entering into an underwriting agreement in customary form and 

 

5

 

 

acting in accordance with the terms and conditions thereof. Notwithstanding anything to the contrary contained herein, no 5% Spinoff Coutu Stockholder is entitled to any rights under this Section 2.

(b)          Priority on Primary Registrations. If a Piggyback Registration is initiated as an underwritten primary registration on behalf of the Company, and the managing underwriter advises the Company that in its reasonable opinion the number of equity securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such equity securities can be sold, then the Company shall include in such registration the maximum number of shares that such underwriter advises can be so sold without having such adverse effect, allocated (i) first, to the equity securities the Company proposes to sell, (ii) second, between other equity securities (of the same class of
the securities being registered and that are the subject of the offering) requested to be included in such Piggyback Registration by the Investor and Green Equity Investors III, LP (“Green”), pro rata among the Investor and Green on the basis of the percentage of the then outstanding shares requested to be registered by them or on such basis as Green and the Investor may agree among themselves and the Company and (iii) third, among other equity securities (of the same class of the securities being registered and that are the subject of the offering) requested to be included in such Piggyback Registration by other security holders of the Company (other than the Investor and Green), pro rata among such holder(s) on the basis of the percentage of the then outstanding shares requested to be registered by them or on such basis as such holder(s) may agree among themselves and the Company.

(c)          Priority on Secondary Registrations. If a Piggyback Registration is initiated as a secondary underwritten registration on behalf of a holder of the Company’s securities other than the Investor, and the managing underwriter advises the Company that in its reasonable opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company shall include in such registration the maximum number of shares that such underwriter advises can be so sold without having such adverse effect, allocated (i) first, to the securities requested to be included therein by the holder(s) requesting
such registration, (ii) second, among other equity securities (of the same class of the securities being registered and that are the subject of the offering) requested to be included in such Piggyback Registration by the Investor and Green (provided that Green is not the requesting holder), pro rata among the Investor and Green on the basis of the percentage of the then outstanding shares requested to be registered by them or on such basis as Green and the Investor may agree among themselves and the Company (iii) third, among other equity securities (of the same class of the securities being registered and that are the subject of the offering) requested to be included in such registration by other security holders of the Company (other than the Investor and Green) and the Company, pro rata among such holder(s) and the Company on the basis of the percentage of the then outstanding shares requested to be registered by them or on such basis
as such holder(s) may agree among themselves and the Company.

(d)          Conflicts with LGP Registration Rights Agreement. Notwithstanding anything to the contrary contained in this Section 2, to the extent the provisions of this Section 2 conflict with the terms of the LGP Registration Rights Agreement (as defined in Section 2(g) below), the terms of the LGP Registration Rights Agreement will control. Section 2.2(b) of the LGP 

 

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Registration Rights Agreement prohibits holders of the Company’s securities from having piggyback registration rights on underwritten takedowns on a shelf registration statement filed pursuant to Section 2.1(d) of the LGP Registration Rights Agreement.

(e)          “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in New York, New York.

(f)           “Closing” has the meaning set forth in the second “Whereas” clause to the Stockholder Agreement.

(g)          “LGP Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement dated as of January 31, 2005, by and among the Company and Green.

	
            3.
 	
            Other Registrations.
 

The Company shall not enter into any agreement with respect to its equity securities that adversely affects the priorities of the Investors in the event of an underwriter cut-back as set forth in Sections 1(d), 2(b) and 2(c) herein (to the extent the Investors have rights pursuant to such Sections).

	
            4.
 	
            Selection of Underwriters.
 

The Investors requesting a Demand Registration shall have the right to select the managing underwriter(s) to administer any Demand Registration subject to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed.

	
            5.
 	
            Holdback Agreements.
 

If requested by the Company or the managing underwriter of an underwritten offering of the Company’s securities, each Investor (including any Lender hereby permitted by Section 10 of this Agreement and any 5% Spinoff Coutu Stockholder) shall agree not to sell or otherwise transfer or dispose of any securities of the Company (other than pursuant to such registration) during the period 5 days prior to and 90 days (or such longer or shorter period that the managing underwriter or the Company, as the case may be, reasonably requests) following the effective date of the Registration Statement relating to the offering of the Company’s securities or the date of filing the prospectus supplement in the case of a shelf takedown, as applicable, unless the managing underwriter agrees to such sale or distribution. At the request of the managing underwriter, or if the Company requests the
holdback agreement as set forth above, the Company will enter into an analogous agreement of the same duration.

	
            6.
 	
            Procedures.
 

(a)          Whenever an Investor requests that any Registrable Securities be registered or sold pursuant to this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended underwritten offering, and pursuant thereto the Company shall as soon as reasonably practicable (unless otherwise stated below):

 

7

 

 

(i)                  prepare and file with the SEC, as applicable, (A) a Registration Statement on the appropriate form under the Securities Act, which form shall be selected by the Company in its sole discretion, with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective or (B) the prospectus supplement contemplated in Section 1(b)(ii) hereof; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including any prospectus supplement for a shelf takedown but not including any report filed or furnished pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC from time
to time thereunder (the “Exchange Act”)), provide to one representative on behalf of all Investors included in such Registration Statement (the “Representative”) and the managing underwriter(s), copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus (but not including any report filed or furnished pursuant to the Exchange Act or any exhibit to the Registration Statement), and the Representative (and the managing underwriter(s)) shall have the opportunity to review and comment thereon, and the Company will make such changes and additions thereto as may be reasonably requested by the Representative (and the managing underwriter(s)) prior to such filing, unless the Company reasonably objects to such changes or additions;

(ii)                 prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be reasonably necessary to keep such Registration Statement continuously effective for a period of 90 days from the date on which the SEC declares such Registration Statement effective or from the date of filing of the prospectus supplement contemplated in the case of Section 1(b)(ii) hereof, as applicable (plus the duration of any Blackout Period), or such shorter period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the intended underwritten offering by the Investor set forth in such Registration Statement or prospectus supplement;

(iii)               furnish to each Investor whose Registrable Securities are included in a Registration Statement such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus) and such other documents as such Investor and any managing underwriter(s) may reasonably request in order to facilitate the disposition of the Registrable Securities; provided, however, that the Company shall have no obligation to furnish copies of a final prospectus if the conditions of Rule 172(c) under the Securities Act are satisfied by the Company.

(iv)                use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions (domestic or foreign) as the Investor(s) whose Registrable Securities are included in a Registration Statement and any underwriter(s) reasonably requests in writing and use its reasonable best efforts to do any and all other acts and things that 

 

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may be reasonably necessary or advisable to enable the Investor(s) and any underwriter(s) to consummate the disposition in such jurisdictions of the Registrable Securities (provided that the Company will not be required to (1) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (iv), (2) subject itself to taxation in any such jurisdiction, (3) consent to general service of process in any such jurisdiction or (4) make any changes to any report filed or furnished pursuant to the Exchange Act that are incorporated by reference into such Registration Statement);

(v)                 notify each Investor whose Registrable Securities are included in a Registration Statement, and any managing underwriter(s) at any time when a Prospectus relating thereto is required to be delivered or made available under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading, and, at the reasonable request of any such Investor or any underwriter(s), the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not
contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

(vi)                in the case of an underwritten offering, (i) enter into such customary agreements (including an underwriting agreement in customary form), (ii) take all such other actions as the Representative or the managing underwriter(s) reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, causing senior management and other Company personnel to reasonably cooperate with the Investor(s) whose Registrable Securities are included in a Registration Statement and the underwriter(s) in connection with performing due diligence) and (iii) cause its counsel to issue opinions of counsel addressed and delivered to the underwriter(s) in form, substance and scope as are customary
in underwritten offerings, subject to customary limitations, assumptions and exclusions;

(vii)              in the case of an underwritten offering, use its reasonable best efforts to cause members of senior management of the Company to be available to participate in, and to reasonably cooperate with the managing underwriter(s) in connection with customary marketing activities (including select conference calls, one-on-one meetings with prospective purchasers and road shows);

(viii)             make available for inspection by the Investor(s) whose Registrable Securities are included in a Registration Statement, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by any such Investor or underwriter, at reasonable times and in a reasonable manner, all pertinent financial and other records, corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Investor, sales or placement agent, underwriter, attorney, accountant or agent to conduct a 

 

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reasonable investigation within the meaning of Section 11 of the Securities Act in connection with such Registration Statement; provided that the foregoing investigation and information gathering shall be coordinated on behalf of such parties by one firm of counsel designated by and on behalf of such parties; and provided, further, that if any such information is identified by the Company as being confidential or proprietary, each Person receiving such information shall agree to take such actions as are reasonably necessary to protect the confidentiality of such information if requested by the Company; 

(ix)                maintain or provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement or prospectus supplement, as applicable;

(x)                 if requested by the managing underwriter(s) of an underwritten offering, use reasonable best efforts to cause to be delivered, upon the pricing of any underwritten offering, and at the time of closing of the sale of Registrable Securities pursuant thereto, “comfort” letters from the Company’s independent registered public accountants addressed to the underwriter(s) stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by “comfort” letters of the independent registered public
accountants delivered in connection with primary underwritten public offerings; 

(xi)                cause all Registrable Securities covered by such registration to be listed on each securities exchange or inter-dealer quotation system on which similar securities issued by the Company are then listed; and

	
             
 	
            (xii)
 	
            notify the Representative and any managing underwriter(s):
 

(1)          when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed (but not including any report filed or furnished pursuant to the Exchange Act) and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

(2)          of any written request by the SEC for amendments or supplements to the Registration Statement or Prospectus;

(3)          of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and

(4)          of the receipt by the Company of any notification with respect to the suspension of the qualification of any 

 

10

 

 

Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction.

(b)          The Company shall make available to each Investor whose Registrable Securities are included in a Registration Statement (i) as soon as reasonably practicable after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, an executed copy of each Registration Statement and any amendment thereto, each preliminary Prospectus and Prospectus and each amendment or supplement thereto (other than filings pursuant to the Exchange Act), each letter written by or on behalf of the Company to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), and each item of correspondence from the SEC or the Staff of the SEC (or other governmental agency
or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), in each case relating to such Registration Statement, and (ii) such number of copies of a Prospectus, including a preliminary Prospectus, and all amendments and supplements thereto and such other documents as the Investor or any underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities. The Company will as soon as reasonably practicable notify the Representative of the effectiveness of each Registration Statement or any post-effective amendment or the filing of the prospectus supplement contemplated in Section 1(b)(ii) hereof. The Company will as soon as reasonably practicable respond to any and all comments received from the SEC or the Staff of the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as reasonably practicable and shall file an
acceleration request as soon as reasonably practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review. The Company may require an Investor to furnish to the Company information regarding such Investor and the distribution of such securities as the Company reasonably determines, based on the advice of counsel, is required or desirable to be included in any Registration Statement or the prospectus supplement contemplated by Section 1(b)(ii) hereof.

(c)          Upon notice from the Company of the happening of any event of the kind described in clauses (2), (3) or (4) of Section 6(a)(xii) hereof or upon notice from the Company of the happening of any event as a result of which the Prospectus included in such Registration Statement (including the prospectus supplement contemplated by Section 1(b)(ii) hereof, as applicable) contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading (a “Suspension Notice”), the Investor(s) will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement for a reasonable length of time until the Investor(s) are advised in writing by the Company that
the use of the Prospectus may be resumed and, if necessary, is furnished with a supplemented or amended Prospectus as contemplated by Section 6(a) hereof. If the Company shall give the Investor(s) any Suspension Notice, the Company shall extend the period of time during which the Company is required to maintain the applicable Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such Suspension Notice to and including the date the Investor(s) either are advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus contemplated by Section 6(a) hereof (a 

 

11

 

 

“Blackout Period”). In any event, the Company shall not be entitled to deliver more than a total of two Suspension Notices in any 12-month period.

	
            7.
 	
            Registration Expenses.
 

(a)          All expenses incident to the Company’s performance of or compliance with this Agreement, including, without limitation, (i) all registration and filing fees (including SEC registration fees and National Association of Securities Dealers, Inc. filing fees), fees and expenses incurred in connection with compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all accountants and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”), shall be borne
by the Company. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which they are to be listed. Notwithstanding anything to the contrary contained herein, Registration Expenses shall not include any underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of Registrable Securities. In connection with each registration initiated hereunder (whether a Demand Registration or a Piggyback Registration in which an Investor elects to participate if it has such right), the Company shall pay or reimburse the Investor(s) for the reasonable documented fees and expenses of one law firm chosen by all of the Investors included in such
Registration Statement as their counsel; provided that such fees and expenses as to any registration shall not exceed $35,000. For the avoidance of doubt, the maximum amount of legal fees and expenses of the Investor(s) that the Company shall be required to reimburse per registration is $35,000 whether or not more than one Investor participates in such registration. 

(b)          The obligation of the Company to bear the expenses described in Section 7(a) hereof shall apply irrespective of whether a registration, once properly demanded, if applicable, becomes effective, is withdrawn or suspended, is converted to another form of registration and irrespective of when any of the foregoing shall occur.

	
            8.
 	
            Indemnification.
 

(a)          The Company agrees to indemnify and hold harmless each Investor, its partners, directors, officers, Affiliates, agents and representatives and each Person who controls (within the meaning of Section 15 of the Securities Act) each Investor from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) (each, a “Liability” and collectively, “Liabilities”), arising out of or based upon any untrue, or allegedly untrue, statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus or arising out of or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading under the circumstances such statements were made, except insofar as such Liability (x) arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission contained in such Registration Statement, preliminary 

 

12

 

 

prospectus or final prospectus in reliance and in conformity with information concerning the Investor furnished in writing to the Company by the Investor expressly for use therein, (y) arises out of or is based upon offers or sales effected by the Investor “by means of” (as defined in Securities Act Rule 159A) a “free writing prospectus” (as defined in Securities Act Rule 405) that was not authorized in writing by the Company, or (z) for any liability which was caused by the Investor’s failure to deliver or make available to the Investor’s immediate purchaser a copy of the Registration Statement or prospectus or any amendments or supplements thereto (if the same was required by applicable law to be delivered or made available); provided, however, the obligations of the Company hereunder
shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities (or actions in respect thereof) if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed). 

(b)          In connection with any Registration Statement in which an Investor is participating pursuant to this Agreement, such Investor shall promptly furnish to the Company in writing such information with respect to the Investor as the Company may reasonably request or as may be required by law for use in connection with any such Registration Statement or prospectus and all information required to be disclosed in order to make the information previously furnished to the Company by such Investor not materially misleading or necessary to cause such Registration Statement not to omit a material fact with respect to the Investor necessary in order to make the statements therein not misleading. Each Investor agrees to indemnify and hold harmless the Company, its directors, officers, Affiliates, agents
and representatives, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act) to the same extent as the foregoing indemnity from the Company to the Investor, but only (x) if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with information with respect to the Investor furnished in writing to the Company by such Investor expressly for use in such Registration Statement or prospectus, (y) for any Liability which arises out of or is based upon offers or sales by such Investor “by means of” (as defined in Securities Act Rule 159A) a “free writing prospectus” (as defined in Securities Act Rule 405) that was not authorized in writing by the Company or (z) for any liability which was caused by such Investor’s failure to deliver or make available to such Investor’s immediate purchaser a copy of the Registration Statement or prospectus or any amendments or
supplements thereto (if the same was required by applicable law to be delivered or made available); provided, however, that (x) an Investor shall not be liable hereunder for any amounts in excess of the gross proceeds received by such Investor pursuant to such registration, and (y) the obligations of an Investor hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Investor (which consent shall not be unreasonably withheld, conditioned or delayed).

(c)          Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such 

 

13

 

 

consent will not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to any local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.

(d)          The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.

(e)          If the indemnification provided for in or pursuant to this Section 8 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that result in such losses, claims, damages, liabilities or expenses as well as any other relevant
equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person on the other 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 information supplied by the indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(f)           Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in an underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

	
            9.
 	
            Rule 144.
 

The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it will take such further action as the Investor may reasonably request to make available adequate current public information with respect to the Company meeting the current public information requirements of Rule 144(c) under the Securities Act, to the extent required to enable an Investor to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as 

 

14

 

 

such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC.

	
            10.
 	
            Transfer of Registration Rights.
 

No Investor may transfer or assign all or any portion of its then remaining rights under this Agreement (except by operation of law pursuant to a merger or similar business combination) without the prior written consent of the Company; provided that the original Investor may assign its rights and obligations hereunder (in whole or in part) to a 100% owned (directly or indirectly) Affiliate that agrees in writing with the Company to be bound by this Agreement as fully as if it were an initial signatory hereto (which Affiliate shall appoint The Corporation Trust Company as its agent to the same extent as the original Investor is required pursuant to Section 11(e)(ii)), and any such transferee may thereafter make corresponding assignments in accordance with this proviso but only to other 100% owned (directly or indirectly) Affiliates of the
original Investor. For purposes of clarity, any assignee permitted by the preceding sentence must remain a 100% owned (directly or indirectly) Affiliate of the original Investor, or else it shall forfeit the rights assigned to it hereunder. Additionally, the original Investor may assign its rights and obligations hereunder (in whole or in part) to a financial institution generally in the commercial lending business (a “Lender”) to which the original Investor or any of its 100% owned (directly or indirectly) Affiliates pledges, encumbers or hypothecates any Registrable Securities or any interest in any Registrable Securities to secure bona fide recourse borrowings effected in good faith so long as: (A) the Investor or any such Affiliate notifies the Company of its intention to enter into such pledge, encumbrance or hypothecation at least five Business Days prior thereto, (B) such Lender is not granted any rights hereunder with
respect to the Registrable Securities prior to any foreclosure, and (C) the Lender agrees in writing with the Investor or any such Affiliate and the Company in an agreement that expressly provides that (x) the Company is a party to such Agreement, entitled to enforce such agreement directly against the Lender and (y) such agreement cannot be amended or modified in any manner which adversely affects the Company without the written consent of the Company. In the event any shares of Registerable Common Stock are transferred to one or more 100% (directly or indirectly) owned Affiliates or a Lender in a manner permitted by this Agreement, the Investor shall notify the Company in writing of a single Person which shall be the authorized representative to receive notices and take all actions on behalf of the Investor and/or its permitted 100% owned (directly or indirectly) Affiliate and Lender assignees. In addition to the foregoing, the original Investor may transfer some or all of its
remaining rights under this Agreement in accordance with Section 12 of this Agreement.

	
            11.
 	
            Miscellaneous.
 

(a)          Notices. All notices and other communications hereunder shall be in writing and shall be addressed as follows (or at such other address for a party as shall be specified by like notice):

 

15

 

 

 

	
             
 	
            If to the Company:
 

Rite Aid Corporation

30 Hunter Lane 

Camp Hill, PA 17011

Facsimile:  (717) 760-7867

	
             
 	
            Attention:  
 	
            Robert B. Sari
 	
             

	
             
 	
            with a copy (which shall not constitute notice) to:
 
					

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Facsimile:  (212) 735-2000

	
             
 	
            Attention:  
 	
            Nancy A. Lieberman
 
	
             
 	
            Stacy J. Kanter
 	
             

	
             
 	
            If to the Investor:
 	
             

						

The Jean Coutu Group (PJC) Inc.

530, Bériault Street

Longueuil QC

J4G 1S8 Canada

Facsimile:  (450) 646-6686

	
             
 	
            Attention:  
 	
            Kim Lachapelle
 	
             

	
             
 	
            with a copy (which shall not constitute notice) to:
 
					

O’Melveny & Myers LLP

Times Square Tower

Seven Times Square

New York, New York 10036

Facsimile:  (212) 326-2061

	
             
 	
            Attention:  
 	
            Spencer D. Klein
 

If to a transferee Investor, to the address of such transferee Investor set forth in the transfer documentation provided to the Company.

All such notices or communications shall be deemed to have been delivered and received: (a) if delivered in person, on the day of such delivery, (b) if by facsimile, on the day on which such facsimile was sent, provided that an appropriate electronic confirmation or answerback is received, or (c) if by a recognized next day courier service, on the first Business Day following the date of dispatch. Each notice, written communication, certificate, instrument and other document required by be delivered under this Agreement shall be in the English language. 

(b)          No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or 

 

16

 

 

privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(c)          Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, subject to Sections 10 and 12 hereof. If the outstanding Rite Aid Common Stock or other Registrable Securities are converted into or exchanged or substituted for other securities issued by any other Person, as a condition to the effectiveness of the merger, consolidation, reclassification, share exchange or other transaction pursuant to which such conversion, exchange, substitution or other transaction takes place, such other Person shall automatically become bound hereby with respect to such other securities constituting Registrable Securities and, if requested by the Investor or a permitted
transferee, shall further evidence such obligation by executing and delivering to the Investor and such transferee a written agreement to such effect in form and substance satisfactory to the Investor. 

(d)          Governing Law. THIS AGREEMENT, THE LEGAL RELATIONS BETWEEN THE PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY WITHIN THAT JURISDICTION, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW RULES THEREOF. 

	
             
 	
            (e)
 	
            Consent to Jurisdiction.
 	
             

	
             
 	
            (i)
 	
            Each party to this Agreement, by its execution hereof, hereby:
 
					

(1)      irrevocably and unconditionally submits to the exclusive jurisdiction in the Court of Chancery of the State of Delaware or any court of the United States located in the State of Delaware, for the purpose of any and all actions, suits or proceedings arising in whole or in part out of, related to, based upon or in connection with this Agreement or the subject matter hereof;

(2)      waives to the extent not prohibited by applicable Law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court; and 

(3)       agrees not to commence any such action other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action to any court other 

 

17

 

 

than one of the above-named courts whether on the grounds of forum non conveniens or otherwise. 

 (ii)        The original Investor hereby irrevocably and unconditionally designates, appoints, and empowers The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf service of any and all legal process, summons, notices and documents that may be served in any action, suit or proceeding brought against such Investor in any such United States federal or state court with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement and that may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall
cease to be available to act as such, such Investor agrees to designate a new designee, appointee and agent in the State of Delaware on the terms and for the purposes of this Section 11(e) reasonably satisfactory to the Company. The original Investor further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any such action, suit or proceeding against such Investor by serving a copy thereof upon the relevant agent for service of process referred to in this Section 11(e) (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by sending copies thereof by a recognized next day courier service to such Investor at its address specified in or designated pursuant to this Agreement. The original Investor agrees that the failure of any such designee, appointee and agent to give any notice of such service to them shall not impair or
affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon.

(f)           Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(g)          Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

(h)          Entire Agreement. This Agreement and the Stockholder Agreement (but only to the extent explicitly referenced herein) contain the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.

(i)           Captions. The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing or enforcing any provision of this Agreement.

 

18

 

 

(j)           Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally
contemplated to the fullest extent possible.

(k)          Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given, without the written consent of the Company and Investors that Beneficially Own a majority of the Registrable Securities.

(l)           Equitable Relief. The parties hereto agree that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.

	
            12.
 	
            Stockholder Pro Rata Distribution.
 

(a)          In addition to the transfers permitted by Section 10 herein, the original Investor may transfer all or some of its remaining registration rights under this Agreement as part of a pro-rata dividend, spin-off, distribution or similar recapitalization (a “Stockholder Pro Rata Distribution”) to a Coutu Stockholder (as defined in Section 12(e) below) that either individually, together with its Affiliates or as a member of a Group (as defined in Section 12(d) below) Beneficially Owns (as defined in Section 12(c) below) more than 5% of the Total Voting Power (as defined in Section 12(f) below) after the Stockholder Pro Rata Distribution (a “5% Spinoff Coutu Stockholder”), so long as:
(A) the original Investor notifies the Company of its intention to consummate such Stockholder Pro Rata Distribution at least five Business Days prior thereto, and (B) the 5% Spinoff Coutu Stockholder shall execute a counterpart signature page to this Agreement stating that it agrees to be bound by the terms and conditions of this Agreement and shall appoint The Corporation Trust Company as its agent to the same extent as the original Investor is required pursuant to Section 11(e)(ii). In the event any Registrable Securities are transferred to one or more 5% Spinoff Coutu Stockholders in a manner permitted by this Agreement, the 5% Spinoff Coutu Stockholder shall notify the Company in writing of a single Person which shall be the authorized representative to receive notices and take all actions on behalf of such 5% Spinoff Coutu Stockholders. The notice provided in accordance with Section 2.2(a)(iv) of the Stockholder Agreement shall be deemed to satisfy the foregoing notice
requirement.

(b)          “Beneficial Ownership” has the meaning set forth in Section 1.1 of the Stockholder Agreement. 

(c)          “Coutu Stockholder” has the meaning set forth in Section 2.2(g) of the Stockholder Agreement.

 

19

 

 

(d)          “Family Member” has the meaning set forth in the preamble to the Stockholder Agreement.

	
             
 	
            (e)
 	
            “Group” has the meaning set forth in Section 1.1 of the Stockholder Agreement.
 

(f)           “Total Voting Power” has the meaning set forth in Section 1.1 of the Stockholder Agreement.

	
            13.
 	
            Effectiveness.
 

This Agreement shall become effective upon the Closing and prior thereto shall be of no force or effect. If the Stock Purchase Agreement shall be terminated in accordance with its terms prior to the Closing, this Agreement and any actions or agreements contemplated hereby shall automatically be of no force or effect.

[Remainder of page intentionally left blank.]

 

20

 

 

 

IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by each of the parties hereto as of the date first written above.

RITE AID CORPORATION

	
             
 	
            By:
 	
            /s/ Robert B. Sari
 	
             

	
             
 	
            Robert B. Sari
 	
             

	
             
 	
            Exec. VP & General Counsel
 
					

THE JEAN COUTU GROUP (PJC) INC.

	
             
 	
            By:
 	
            /s/ Jean Coutu
 
	
             
 	
            Jean Coutu
 	
             

Chairman of the Board, President and Chief Executive Officer

 

 

1141917-New York Server 7A - MSWExhibit 10.1

    
      

    

    [EXECUTION
      COPY]

     

    FIRST
      AMENDMENT AGREEMENT

     

    This
      First Amendment Agreement, dated as of August 24, 2006 (this “First Amendment
      Agreement” or this “Agreement”), amends the Employee Agreement, dated as of
      January 26, 2006 (the “Employee Agreement”), by and between SOUTHERN UNION
      COMPANY, a Delaware corporation (“Seller”), and UGI CORPORATION, a Pennsylvania
      corporation (“Buyer”), and the Purchase and Sale Agreement, dated as of January
      26, 2006 (the “Sale Agreement”), between Seller and Buyer.

     

    RECITALS

     

    WHEREAS,
      the parties desire to make certain amendments to the Employee Agreement and
      the
      Sale Agreement to the extent and in the manner hereinafter set forth;
      and

     

    WHEREAS,
      Section 10.1 of the Sale Agreement incorporates the terms and provisions of
      the
      Employee Agreement, and Section 13.12 of the Sale Agreement permits the
      amendment of the Sale Agreement only by an instrument in writing executed by
      Seller and Buyer.

     

    NOW,
      THEREFORE, in consideration of the premises and agreements contained herein,
      and
      for other good and valuable consideration, the receipt and sufficiency of which
      are hereby acknowledged, and intending to be legally bound hereby, the parties
      hereto hereby agree as follows:

     

    1.
      Defined
      Terms. All
      capitalized terms used, but not defined, in this Agreement shall have the
      meanings ascribed or given to them under the terms of the Employee Agreement
      or
      the Sale Agreement.

     

    2.
      Amendments
      to the Employee Agreement.
      The
      parties hereby agree to the following amendments to the Employee
      Agreement:

     

    (a) Section
      1.1. Section
      1.1 of the Employee Agreement shall be amended to add the following
      definition:

     

    “Unfunded
      ABO under Seller’s Pension Plan” shall
      mean the unfunded accumulated benefit obligation under Seller’s Pension Plan,
      determined by Seller’s actuaries in accordance with Statement of Financial
      Accounting Standard No. 87 as of the last day of the month preceding the Closing
      Date, based on (1) the most recently available January 1st
      census
      data projected to such last day of the month preceding the Closing Date, (2)
      asset values determined as of such last day of the month preceding the Closing
      Date, and (3) the discount rate, determined using the Citigroup Pension Discount
      Curve, determined as of the end of the month preceding the Closing Date, as
      posted on the Society of Actuaries’ website; provided, however, that such
      determination by Seller’s actuaries shall be subject to confirmation of such
      calculation by Buyer’s actuaries.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Section
      1.2. Section
      1.2 of the Employee Agreement shall be amended to delete the reference to
“Buyer’s Pension Plan,” which was defined in Section 3.1 of the Employee
      Agreement.

     

     

    (c)
      Section
      2.6. Section
      2.6 of the Employee Agreement shall be amended to delete the final sentence
      of
      Section 2.6.

     

    (d) Section
      3.1. Section
      3.1 of the Employee Agreement shall be amended and restated in its entirety
      to
      read as follows:

     

    Section
      3.1 Pension
      Plans. Seller
      has no defined benefit plan that covers the Employees and that is intended
      to be
      a qualified plan other than the Employees’ Retirement Plan of Southern Union
      Company Pennsylvania Division (“Seller’s Pension Plan”). No later than the
      Closing Date, Seller shall contribute, in cash, to Seller’s Pension Plan an
      amount equal to the Unfunded ABO under Seller’s Pension Plan, plus interest, at
      the discount rate as of the end of the month preceding the Closing Date used
      to
      determine the Unfunded ABO under Seller’s Pension Plan, for the period beginning
      on the last day of the month preceding the Closing Date until the Closing Date.
      Effective as of the Closing Date, Buyer shall assume sponsorship of, and all
      assets (held in trust), liabilities and obligations under, Seller’s Pension
      Plan, including liability for any contributions due after the Closing Date.
      Seller acknowledges and confirms to Buyer that, as a result of Seller’s
      contribution of an amount equal to the Unfunded ABO under Seller’s Pension Plan
      no later than the Closing Date, no further contributions with respect to
      Seller’s Pension Plan will be required for the 2005 plan year. Seller also
      acknowledges and confirms to Buyer that Seller has made, on a timely basis,
      the
      first two required quarterly contributions with respect to Seller’s Pension Plan
      for the 2006 plan year. On the Closing Date, or as soon as administratively
      feasible following the Closing Date, but in no event later than five business
      days after the Closing Date, the assets held in trust under Seller’s Pension
      Plan shall be transferred, in accordance with the letter agreement between
      the
      parties relating to such transfer of assets, to
      a
      trust designated by Buyer to fund Seller’s Pension Plan following the Closing
      Date. Seller and Buyer shall take all action necessary and appropriate to
      establish Buyer, effective as of the Closing Date, as successor to Seller as
      to
      all rights, assets (held in trust), duties, liabilities and obligations under
      or
      with respect to Seller’s Pension Plan. Buyer shall be responsible for the
      preparation and filing of any annual reports relating to plan years that include
      the Closing Date; provided, however, that Seller shall furnish Buyer with such
      information concerning Seller’s Pension Plan as is necessary to prepare such
      forms, specifically including an executed Schedule B attachment for the 2006
      Form 5500, which Buyer may choose to use in connection with such filing.
Seller
      shall be responsible for the preparation and filing of any annual reports
      relating to all plan years ending prior to the Closing Date.

     

    3.
      Amendments to the Sale Agreement.
      The
      parties hereby agree to the following amendments to the Sale
      Agreement:

     

    (a)
      Section 1.1. Section
      1.1 of the Sale Agreement shall be amended by (i) amending clause (i) of the
      definition “Excluded Assets” by inserting at the beginning 

     

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    thereof
      the phrase “Except as otherwise provided in Section 6.9,” and (ii) deleting the
      figure “$67,500,000” appearing in the definition “Working Capital Target” and
      substituting therefor the figure “$68,100,000”.

     

    (b)
      Section 2.2(c).
      Section
      2.2(c) shall be amended to read in its entirety: “(c) obligations and
      liabilities of Buyer and its Affiliates under the Employee Agreement and all
      liabilities or obligations relating to the matter set forth on Schedule
      2.2(c).

     

    (c)
      Section 2.3.
      Section
      2.3 shall be amended by deleting from clause (e) thereof the phrase “, and all
      liabilities or obligations relating to the matter set forth on Schedule
      2.3(b)”.

     

    (d)
      Schedule 2.3(b).
      Schedule 2.3(b) shall be redesignated as Schedule 2.2(c). 

     

    (e)
      Section 5.13. Section
      5.13 of the Sale Agreement shall be amended and restated in its entirety to
      read
      as follows:

     

    Section
      5.13 Employee Benefit Matters.

     

    (a)
      Schedule
      5.13
      lists
      (i) each “Employee Benefit Plan,” as such term is defined in Section 3(3) of
      ERISA, that is covered by any provision of ERISA and that is maintained by
      Seller for the benefit of the Employees and each other material fringe benefit
      plan, policy or arrangement currently maintained by Seller for the benefit
      of
      the Employees that provides for pension, deferred compensation, bonuses,
      severance, employee insurance coverage or similar employee benefits
      (collectively, the “Employee Plans”); and (ii) each collective bargaining, union
      or other employee association agreement, employment agreement and other material
      agreement, policy or arrangement maintained by Seller for the Employees. Seller
      has made available to Buyer copies of all documents setting forth the terms
      of
      such plans, policies, agreements and arrangements, or summaries of any such
      plans, policies, agreements and arrangements not otherwise in
      writing.

     

    (b)
      Seller’s Pension Plan and Seller’s 401(k) Plan are the only Employee Plans that
      are intended to be qualified under Section 401(a) of the IRC.

     

    (c)
      The
      Subsidiary does not employ any Employees or any other individuals and does
      not
      currently maintain any Employee Plan.

     

    (d)
      To
      the Seller’s Knowledge, each Employee Benefit Plan maintained by Seller for the
      benefit of the Employees has been established and administered in all material
      respects in accordance with its terms and the applicable provisions of ERISA
      and
      the IRC.

     

    (e) Seller
      has delivered to Buyer true, correct and complete copies of (i) all current
      documents governing Seller’s Pension Plan, and all amendments thereto, and to
      the extent that Seller has possession of same, any predecessor or prior versions
      of Seller’s Pension Plan, (ii) all reports filed on or after November 4, 1999 by
      Seller, a 

     

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    Benefits
      Affiliate or a Plan official with the United States Department of Labor, the
      IRS
      or any other federal or state regulatory agency with respect to Seller’s Pension
      Plan, (iii) all summary plan descriptions, notices and other reporting and
      disclosure material furnished to participants in Seller’s Pension Plan, (iv) all
      actuarial, accounting and financial reports, if any, prepared with respect
      to
      Seller’s Pension Plan on or after November 4, 1999, (v) all current manuals,
      procedures, guidelines, forms, files and data pertaining to the administration
      of Seller’s Pension Plan, (vi) all post-November 4, 1999 minutes, resolutions,
      determinations of any committee, person or other entity serving as plan
      administrator or otherwise acting in a fiduciary capacity with respect to the
      administration or management of Seller’s Pension Plan, and (vii) all currently
      effective IRS ruling or determination letters on Seller’s Pension Plan. The term
“Benefits Affiliate” shall include (i) any corporation which is a member of a
      controlled group of corporations (as defined in section 414(b) of the IRC)
      which
      includes Seller, (ii) any trade or business (whether or not incorporated) which
      is under common control (as defined in section 414(c) of IRC) with Seller,
      (iii)
      any organization (whether or not incorporated) which is a member of an
      affiliated service group (as defined in section 414(m) of the IRC) which
      includes Seller and (iv) any other entity required to be aggregated with Seller
      pursuant to the regulations issued under section 414(o) of the IRC.

     

    (f) Seller’s
      Pension Plan and provisions thereof, any trusts created thereby and the
      operation of Seller’s Pension Plan are (and at all times have been) in
      compliance in all material respects with the terms of Seller’s Pension Plan and
      conform (and at all times have been in compliance with and conformed) in all
      material respects to the applicable provisions of the IRC, ERISA and all other
      applicable statutes and governmental rules and regulations.

     

    (g)
      Seller’s Pension Plan has been determined by the IRS to be qualified in form
      under section 401(a) of the IRC and exempt from tax under section 501(a) of
      the
      IRC, and each such determination remains in effect and has not been revoked.
      To
      the Seller’s Knowledge, nothing has occurred with respect to the design or
      operation of Seller’s Pension Plan that could cause the loss of such
      qualification or exemption or the imposition of any liability, lien, penalty
      or
      tax under ERISA or the IRC. Any amendment to Seller’s Pension Plan to comply
      with current law and regulations that is required to be made on or before the
      Closing Date has been timely made.

     

    (h)
      With
      respect to Seller’s Pension Plan, there has occurred no non-exempt “prohibited
      transaction” (within the meaning of section 4975 of the IRC or section 406 of
      ERISA) or breach of any fiduciary duty described in section 404 of ERISA that
      could result in any liability, direct or indirect, for Seller or a Benefits
      Affiliate or any shareholder, officer, director or employee of Seller or a
      Benefits Affiliate. Seller and its Benefits Affiliates have paid all amounts
      that Seller and its Benefits Affiliates are required to pay as contributions
      to
      Seller’s Pension Plan as of the Closing Date.

     

    (i)
      Seller and its Benefits Affiliates have not incurred any liability for any
      excise, income or other taxes or penalties with respect to Seller’s Pension
      Plan, and to the Seller’s Knowledge, no event has occurred and no circumstance
      exists or has existed that could give rise to any such liability. There are
      no
      pending or, to the Knowledge of Seller, 

     

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    threatened
      claims by or on behalf of Seller’s Pension Plan, or by or on behalf of any
      participants in or beneficiaries of Seller’s Pension Plan or other persons,
      alleging any breach of fiduciary duty on the part of Seller or any Benefits
      Affiliate or any of their officers, directors or employees under ERISA or any
      applicable law, or except as set forth in Schedule
      5.13(i),
      claiming benefit payments other than those made in the ordinary operation of
      Seller’s Pension Plan, nor is there any basis for any such claim. Seller’s
      Pension Plan is not presently under audit or examination (nor has notice been
      received of a potential audit or examination) by the IRS, the Department of
      Labor or any other governmental entity, and no matters are pending with respect
      to Seller’s Pension Plan under any IRS program. Seller has delivered to Buyer
      any memorandum pertaining to self-correction of any operational defects with
      regard to Seller’s Pension Plan.

     

    (j)
      Neither Seller nor any Benefits Affiliate has made any plan or commitment,
      whether or not legally binding, to modify or change the terms of Seller’s
      Pension Plan. Seller’s Pension Plan may be amended or terminated without penalty
      by Buyer or its Benefits Affiliates at any time on or after the Closing, subject
      to any requirements under the collective bargaining agreements referred to
      in
      Section 2.2 of the Employee Agreement and subject to applicable legal
      requirements, specifically including the anti-cutback requirements under section
      411(d)(6) of the IRC.

     

    (k)
      The
      only representations and warranties given in respect of employee benefit matters
      are those contained in this Section 5.13 and none of the other representations
      and warranties contained in this Agreement shall be deemed to constitute,
      directly or indirectly, a representation or warranty in respect of employee
      benefit matters.

     

    (f)
      Schedule 5.13. The
      attached revised Schedule
      5.13
      to the
      Sale Agreement is hereby substituted for the original Schedule 5.13 to the
      Sale
      Agreement. The original Schedule 5.13 incorrectly listed the Southern Union
      Company Severance Pay Plan as the Southern Union Company Severance Plan, and
      it
      failed to list collective bargaining agreements. The Schedules to the Sale
      Agreement are further amended by the addition of new Schedule 5.13(i) in the
      form attached hereto.

     

    (g)
      Section 6.9. Section
      6.9 of the Sale Agreement shall be amended in its entirety to read as
      follows:

     

    Section
      6.9. Insurance.

     

    (a)
      At
      Buyer’s request and expense, Seller agrees to use commercially reasonable
      efforts to assert and diligently pursue all rights to insurance coverage under
      the Policies (other than with respect to Workman’s Compensation and punitive
      damage policies) and any other past insurance policies of Seller relating to
      the
      Business or the Assets (such insurance policies shall collectively be referred
      to herein as the “Insurance Policies”) with respect to claims arising from the
      Business or Assets relating to Assumed Liabilities, whether asserted prior
      to or
      after the Closing Date. Seller shall advise Buyer of material developments
      in
      respect of such claims and shall not settle or otherwise resolve any claims
      so
      asserted without the prior consent of Buyer, such consent not to be unreasonably
      withheld, provided, however, that Seller may settle claims or policies

     

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    relating
      to the Business or the Assets relating to Assumed Liabilities (other than claims
      under or policies constituting AEGIS Policies, as defined in clause (b) below)
      without the prior consent of Buyer in connection with a settlement of policies
      of Seller relating to the Excluded Assets or Retained Liabilities, including
      Seller’s businesses other than the Business, subject to remittance by Seller to
      Buyer of an allocable portion of the proceeds of such settlement (net of
      Seller’s costs and expenses), as determined by the insurers with whom such
      claims are settled (or in the absence of such allocation by the insurers, by
      Seller in proportion to the claims attributable to the Assumed Liabilities
      to
      the totality of Seller’s claims to such insurers). Seller shall remit to Buyer
      all insurance proceeds obtained after Closing in respect of claims arising
      from
      the Business or Assets relating to Assumed Liabilities. Seller agrees to use
      commercially reasonable efforts to negotiate with each of its insurance
      companies in order to provide Buyer the benefit of the coverage under the
      policies for all claims arising prior to the Closing from the Business or Assets
      related to the Assumed Liabilities whether asserted before or after the Closing
      Date and to cooperate with Buyer with any efforts to obtain “tail” coverage, at
      Buyer’s sole cost, with respect to any “claims made policies.” Notwithstanding
      anything herein to the contrary, any recovery of insurance proceeds by Buyer
      shall be net of all Seller’s cost and expenses. Seller shall give access to
      Buyer to all of the non-privileged information relating to these matters and
      shall consult with Buyer on the progress thereof from time to time. Nothing
      set
      forth in this Section 6.9 shall limit Seller’s right to assert claims under any
      Insurance Policies in respect of Retained Liabilities. 

     

    (b)
      Upon
      Buyer’s request, except as otherwise provided herein, to the maximum extent
      permitted by the terms of the Insurance Policies listed on Part I of Schedule
      6.9(b) (the “AEGIS Policies”), Seller shall transfer, assign, convey and deliver
      to Buyer all Seller’s rights, if any, under the AEGIS Policies solely to the
      extent of coverage arising from the Business or Assets relating to Assumed
      Liabilities. Anything in this Agreement to the contrary notwithstanding, this
      Section 6.9(b) shall not be construed to operate as an assignment of any rights
      under any such AEGIS Policy if an attempted assignment thereof, without the
      Consent of a third party thereto, would render such AEGIS Policy null and void
      or otherwise adversely affect the aggregate amount or terms of coverage
      available thereunder. In addition, Seller shall use commercially reasonable
      efforts to cause the insurer in respect of Policy No. X0012A1A06 (constituting
      one of the AEGIS Policies) to issue an endorsement substantially in the form
      attached hereto as Part II of Schedule 6.9(b), and Buyer acknowledges that
      issuance of such endorsement shall satisfy Seller’s obligations under the fourth
      sentence of Section 6.9(a) with respect to such AEGIS Policy. In the event
      that
      the insurer under the AEGIS Policies shall fail to pay a claim arising from
      the
      Business or Assets relating to the Assumed Liabilities, Seller agrees that,
      at
      Buyer’s request, Seller shall use commercially reasonable efforts to pursue such
      claim against the insurer, including through litigation, at the sole expense
      of
      Buyer. Seller shall advise Buyer of material developments in respect of such
      claims and shall not settle or otherwise resolve any such claim without the
      prior consent of Buyer, such consent not to be unreasonably withheld. Buyer
      hereby acknowledges that Seller has asserted, and there are currently
      outstanding, claims under certain of the AEGIS Policies in an aggregate amount
      equal to $2.3 million in respect of environmental costs and expenses incurred
      by
      Seller prior to the Closing (“Seller’s Environmental Claim”). Except as provided
      in this Section 6.9(b), Seller shall keep the 

     

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    AEGIS
      Policies in full force and effect, take no action with respect to the AEGIS
      Policies to terminate or reduce the coverage available thereunder and make
      all
      required payments thereunder. Notwithstanding anything herein to the contrary,
      Seller shall not be obligated, in respect of any policy period after the Closing
      Date, to continue to purchase insurance coverage from AEGIS. To the extent
      that
      the AEGIS Policies provide coverage for the benefit of both Buyer and Seller,
      both parties reserve the right to submit claims under those policies and to
      use
      commercially reasonably efforts to prosecute such claims provided the resolution
      of the claim does not reduce the amount of coverage available to the other
      party
      by more than the amount of proceeds recovered by such party. 

    

    (c)
      Except as provided in this Section 6.9(c), after the Closing, Buyer shall be
      responsible for, and neither Seller nor any of its Affiliates shall have any
      responsibility for, the payment of any deductible amounts, underlying limits
      or
      excess or excluded amounts attributable to the Insurance Policies, provided
      that
      Seller shall retain such responsibility for claims that relate to the Retained
      Liabilities and Seller’s Environmental Claim. Buyer acknowledges that certain of
      the Insurance Policies may require Seller or any of its Affiliates to provide
      an
      indemnity to the insurer for deductible amounts and to provide collateral to
      secure such indemnity obligations. Buyer shall enter into an indemnification
      agreement in form mutually acceptable to Buyer and Seller wherein Buyer agrees
      to indemnify and hold harmless Seller or any of its Affiliates (as applicable)
      for any and all of the costs of maintaining such collateral and for any charges
      made against such collateral or indemnification payments or for any expenses
      reasonably incurred by Seller in connection with claims arising or alleged
      to
      arise from the operations of the Business under or with respect to such
      Insurance Policies from and after the Closing Date. If there is a retrospective
      adjustment in respect of any of the Insurance Policies, Buyer shall pay to
      Seller its allocable portion of such adjustment.

    

    (d)
      Seller makes no representation or warranty with respect to the applicability,
      validity or adequacy of any Insurance Policies, and Seller shall not be
      responsible to Buyer or any of its Affiliates for the failure of any insurer
      to
      pay under such Insurance Policy.

    

    (e)
      Nothing in this Agreement is intended to provide or shall be construed as
      providing a benefit or release to any insurer or claims service organization
      of
      any obligation under any Insurance Policy. Nothing herein shall be construed
      as
      creating or permitting any insurer or claims service organization the right
      of
      subrogation against Seller or Buyer or any of their Affiliates in respect of
      payments made by one to the other under any Insurance Policy.

     

    (h)
      Schedule 6.9.
      The Sale
      Agreement shall be amended by adding thereto new Schedules 6.9(a) and 6.9(b)
      in
      the forms attached hereto.

     

    (i)
      Section 6.13.
      Section
      6.13 of the Sale Agreement shall be amended by amending the second sentence
      thereof to read in its entirety as follows: “Seller shall deliver the Audited
      Financials to Buyer not later than five (5) Business Days after the
      Closing.”

     

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    (j)
      Section 6.15. The
      Sale
      Agreement shall be amended by inserting therein a new Section 6.15 to read
      in
      its entirety as follows:

     

    Section
      6.15. Further Assurances; Cooperation.
      From
      time to time after the Closing Date, without further consideration, Seller
      will
      execute and deliver such documents to Buyer as Buyer may reasonably request
      in
      order to more effectively consummate the sale and purchase of the Assets or
      to
      more effectively vest in Buyer good and indefeasible title to the Assets subject
      to the Permitted Encumbrances. Seller shall cooperate with Buyer, at Buyer’s
      expense, in Buyer’s efforts to cure or remove any Permitted Encumbrances that
      Buyer reasonably deems objectionable. From time to time after the Closing Date,
      without further consideration, Buyer will execute and deliver such documents
      to
      Seller as Seller may reasonably request in order to evidence Buyer’s assumption
      of the Assumed Liabilities.

    

    (k)
      Section 12.3. The first
      sentence of Section 12.3(b) shall be amended in its entirety to read as
      follows:

     

    Except
      as
      provided below, the representations and warranties of Seller set forth in this
      Agreement shall survive the Closing until the first anniversary of the Closing
      Date; provided,
      however,
      that (i)
      the representations and warranties set forth in Section 5.2 (Authority Relative
      to this Agreement and Binding Effect), Section 5.5 (Title to Assets;
      Encumbrances), and Section 5.17 (Brokers) shall survive indefinitely, (ii)
      representations and warranties set forth in Section 5.9 (Taxes) shall survive
      for a period equal to the applicable statute of limitations for the taxable
      year
      for each Tax, and (iii) representations and warranties set forth in clauses
      (e)
      through (j) of Section 5.13 shall survive until the second anniversary of the
      Closing Date.

     

    (l)
      Section 12.4.
      Section
      12.4 shall be amended by adding at the end thereof the following sentence:
      “Buyer shall have no liability for any claim or Loss to the extent of insurance
      proceeds actually received by Seller in respect thereof under insurance
      maintained by or for the benefit of Seller or any Affiliate of
      Seller.”

     

    4.
      No
      Other Modification.
      This
      First Amendment Agreement amends the Sale Agreement and the Employee Agreement
      only to the extent and in the manner herein set forth. In all other respects,
      the terms and conditions of the Sale Agreement and the Employee Agreement shall
      remain in full force and effect.

     

    5.
      Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which will
      be
      deemed an original, but all of which together will constitute one and the same
      instrument.

     

    [Remainder
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    IN
      WITNESS WHEREOF, the
      parties have caused this Agreement to be executed and delivered by their duly
      authorized officers as of the date first written above.

     

    SOUTHERN
      UNION COMPANY

     

    By:
      /s/
      ROBERT M. KERRIGAN III

    Name:
      Robert
      M. Kerrigan III

    Title:
      Vice
      President - Assistant General

                                                                                                            
       Counsel
      and Secretary

     

    UGI
      CORPORATION

     

    By:
      /s/
      ROBERT H. KNAUSS

    Name:
      Robert
      H. Knauss

    Title:
      Vice
      President and General Counsel

     

    [Signature
      page to First Amendment Agreement

    between
      Southern Union Company and UGI Corporation]

     

    

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    Schedule
      6.9(b)

    

    Part
      I

    

    AEGIS
      Policies:

    

    168 

    168A 

    168NJ 

    

    X0168A1A89

    X0168A1A90

    X0168A1A91

    X0168A1A92

    X0168A1A93

    X0168A1A94

    X0168A1A95

    X0168A1A96

    

    X0012A1A06

    

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    Schedule
      6.9(b)

    

    Part
      II

    

    

    Effective
      "Date of Sale"

    

    ["In
      consideration of the return premium of $xxxxxx it is herein agreed that this
      POLICY shall no longer provide coverage for CLAIMS arising out of the "assets
      sold to UGI" which occur on or after the date of  Closing .   In
      accordance with Definition P(3), CLAIMS arising out of the "assets sold to
      UGI"
      which occurred prior to the date of Closing will be covered by this POLICY
      subject to the terms and conditions herein."]

    

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        11

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