Rite Aid Corporation (NYSE:RAD) Files An 8-K Entry into a Material Definitive Agreement

Rite Aid Corporation (NYSE:RAD) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01. Entry into a Material Definitive Agreement.

Asset Purchase Agreement

On December19, 2016, Rite Aid Corporation (Rite Aid) entered into
an Asset Purchase Agreement (the Asset Purchase Agreement) with
AFAE, LLC, a Tennessee limited liability company (Buyer),
Freds,Inc., a Tennessee corporation (Freds) (solely for the
purposes set forth in the Asset Purchase Agreement) and Walgreens
Boots Alliance,Inc., a Delaware corporation (WBA) (solely for the
purposes set forth in the Asset Purchase Agreement). to the terms
and subject to the conditions set forth in the Asset Purchase
Agreement, Buyer will purchase from Rite Aid 865 stores (the
Acquired Stores) and certain specified assets related thereto for
a purchase price of $950,000,000 plus Buyers assumption of
certain liabilities of Rite Aid and its affiliates (the Sale).

Consummation of the Sale is subject to various closing
conditions, including but not limited to (i)the closing of the
previously announced proposed acquisition of Rite Aid by WBA (the
Rite Aid Acquisition), (ii)the Federal Trade Commission (FTC)
having issued publicly the proposed final judgment relating to
the Acquired Stores in connection with the Rite Aid Acquisition
identifying Buyer as being preliminarily approved as the
purchaser of the assets purchased under the Asset Purchase
Agreement, (iii)filings with or receipt of approval from the
applicable state boards of pharmacy, and (iv)the absence of a
material adverse effect on the stores being acquired in the Sale.

The parties to the Asset Purchase Agreement have each made
customary representations and warranties. Rite Aid has agreed to
various covenants and agreements, including, among others, Rite
Aids agreement to conduct its business at the Acquired Stores in
the ordinary course during the period between the execution of
the Asset Purchase Agreement and the closing of the Sale, subject
to certain exceptions. Freds and Buyer have also agreed to
various covenants and agreements in the Asset Purchase Agreement,
including, among other things, (i)Freds and Buyers agreement to
use their reasonable best efforts to obtain all authorizations
and approvals from governmental authorities and (ii)Freds and
Buyers agreement to (x)prepare and furnish all necessary
information and documents reasonably requested by the FTC, (y)use
reasonable best efforts to demonstrate to the FTC that each of
Freds and Buyer is an acceptable purchaser of, and will compete
effectively using, the assets purchased in the Sale, and
(z)reasonably cooperate with WBA and Rite Aid in obtaining all
FTC approvals. In the event that the FTC requests changes to the
Asset Purchase Agreement, the parties agreed to negotiate in good
faith to make the necessary changes. To the extent the FTC
requests that additional stores be sold, and WBA agrees to sell
such stores, each of Freds and Buyer has agreed to buy those
stores.

The Asset Purchase Agreement contains specified termination
rights for Rite Aid, WBA and Buyer, including a mutual
termination right (i)in the event of the issuance of a final,
nonappealable governmental order permanently restraining the Sale
or (ii)in the event that the Agreement and Plan of Merger in
connection with the Rite Aid Acquisition is terminated in
accordance with its terms. WBA has additional termination rights,
if, among others thing, (i)Buyer or Freds is not preliminarily
approved by the FTC or other necessary governmental authority as
purchaser of the assets in the Sale or (ii)the FTC informs WBA or
its affiliates in writing that the Director of the Bureau of
Competition will not recommend approval of Freds or Buyer as
purchaser of the assets in the Sale.

The foregoing description of the Asset Purchase Agreement and
the transactions contemplated thereby does not purport to be
complete. The Asset Purchase Agreement contains representations
and warranties by each of the parties to the Asset Purchase
Agreement, which were made only for purposes of that agreement
and as of specified dates. The representations, warranties and
covenants in the Asset Purchase Agreement were made solely for
the benefit of the parties to the Asset Purchase Agreement; are
subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosure schedules;
may have been made for the purposes of allocating contractual
risk between the parties to the Asset Purchase Agreement
instead of establishing these matters as facts; and are subject
to standards of materiality applicable to the contracting
parties that may differ from those applicable to investors.
Investors should not rely on the representations, warranties
and covenants or any descriptions thereof as characterizations
of the actual state of facts or condition of the Rite Aid, WBA,
Buyer or Freds or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter
of the representations, warranties and covenants may change
after the date of the Asset Purchase Agreement, which
subsequent information may or may not be fully reflected in
Rite Aids public disclosures.

Item 7.01. Regulation FD Disclosure.

On December20, 2016, Rite Aid and WBA issued a joint press
release announcing the execution of the Asset Purchase
Agreement. A copy of the press release is furnished as
Exhibit99.1 hereto and is incorporated herein by reference.

Cautionary Statement Regarding Forward Looking
Statements

Certain statements in this communication may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as
anticipate, believe, continue, could, estimate, expect, intend,
may, plan, predict, project, should, and will and variations of
such words and similar expressions are intended to identify
such forward-looking statements.

All statements, other than historical facts, including
statements regarding the expected timing of the closing of the
transactions; the ability of the parties to complete the
transactions considering the various closing conditions; the
expected benefits of the transactions such as improved
operations, enhanced revenues and cash flow, growth potential,
market profile and financial strength; the competitive ability
and position of the companies following completion of the
proposed transactions; and any assumptions underlying any of
the foregoing, are forward-looking statements. The inclusion of
such statements should not be regarded as a representation that
such plans, estimates or expectations will be achieved. These
forward-looking statements are based upon current plans,
estimates and expectations, are not guarantees of future
performance and involve risks, assumptions and uncertainties,
including, but not limited to, risks related to the possibility
that the transactions may not close, including because one or
more closing conditions to the transactions, including certain
regulatory approvals, may not be satisfied or waived, on a
timely basis or otherwise, including that a governmental entity
may prohibit, delay or refuse to grant approval for the
consummation of the transactions, or may require conditions,
limitations or restrictions in connection with such approvals;
the risk that there may be a material adverse change of Rite
Aid or the acquired stores, or the business of Rite Aid or the
acquired stores may suffer as a result of uncertainty
surrounding the transactions; risks related to the ability to
realize the anticipated benefits of the proposed transactions,
including the possibility that the expected synergies from the
proposed transactions will not be realized or will not be
realized

within the expected time period; the risk that the businesses
and acquired stores, as applicable, will not be integrated
successfully; risks associated with the financing of the
proposed transactions; disruption from the proposed
transactions making it more difficult to maintain business and
operational relationships; significant transaction costs;
unknown liabilities; the risk of litigation and/or regulatory
actions related to the proposed transactions; other business
effects, including the effects of industry, market, economic,
political or regulatory conditions or changes in federal or
state laws or regulations; future exchange or interest rates or
credit ratings; changes in tax laws, regulations, rates and
policies; competitive developments; and risks and uncertainties
discussed in the reports that Walgreens Boots Alliance and Rite
Aid have filed with the U.S. Securities and Exchange
Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or
anticipated by such forward-looking statements. Accordingly,
you are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
they are made. Walgreens Boots Alliance and Rite Aid expressly
disclaim any current intention to update publicly any
forward-looking statement after the distribution of this
communication, whether as a result of new information, future
events, changes in assumptions or otherwise. A further list and
description of risks and uncertainties can be found in
Walgreens Boots Alliances Annual Report on Form10-K for the
fiscal year ended August31, 2016 and its subsequent filings;
and in Rite Aids Annual Report on Form10-K for the fiscal year
ended February27, 2016 and its subsequent filings. There can be
no assurance that the requisite regulatory approvals will be
obtained, or that the transactions will be completed within the
required time period. This communication does not constitute an
offer of any securities for sale.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1

Press release issued by Rite Aid Corporation and
Walgreens Boots Alliance,Inc. on December20, 2016.


About Rite Aid Corporation (NYSE:RAD)

Rite Aid Corporation is a retail drugstore chain. The Company’s segments include Retail Pharmacy and Pharmacy Services. The Company operates under The Rite Aid name. It operates approximately 4,560 stores in over 30 states across the country and in the District of Columbia. The Company’s Retail Pharmacy segment consists of Rite Aid stores, RediClinic and Health Dialog. It sells brand and generic prescription drugs, as well as an assortment of front-end products, including health and beauty aids, personal care products, seasonal merchandise, and a private brand product line. Its front-end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise and numerous other everyday and convenience products. The Company’s Pharmacy Services segment consists of EnvisionRx, which provides a range of pharmacy benefit services.

Rite Aid Corporation (NYSE:RAD) Recent Trading Information

Rite Aid Corporation (NYSE:RAD) closed its last trading session up +0.43 at 8.60 with 17,819,141 shares trading hands.

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