Item 1.01. Entry into a Material Definitive Agreement.
On November 24, 2021, Walgreens Boots Alliance, Inc. (the "Company") completed
the previously announced transactions contemplated by the Class D Preferred Unit
Purchase Agreement, dated October 14, 2021 (the "Unit Purchase Agreement"), by
and among WBA Acquisition 5, LLC ("Walgreens"), Village Practice Management
Company, LLC ("VillageMD") and, for certain purposes specified therein, the
Company and another of its subsidiaries and certain other members of VillageMD
(the "Specified Members").
Pursuant to the terms and subject to the conditions of the Unit Purchase
Agreement, Walgreens, a subsidiary of the Company and assignee of WBA
Acquisition 4, LLC, acquired Class D Preferred Units of VillageMD and securities
corresponding to the rights and obligations of Class D Preferred Units held by
certain Specified Members in exchange for $5.2 billion in aggregate
consideration (collectively, the "Transaction"). The Transaction increased the
Company's beneficial ownership of the outstanding equity interests of VillageMD
from approximately 30% to approximately 63% on a fully diluted basis.
Seventh Amended and Restated Limited Liability Company Agreement
On November 24, 2021, in connection with the consummation of the Transaction,
Walgreens, certain other members of VillageMD and VillageMD amended and restated
in its entirety the existing Sixth Amended and Restated Limited Liability
Company Agreement of VillageMD, dated as of December 30, 2020 (such amendment
and restatement, the "Seventh A&R LLCA"). Among other things, the Seventh A&R
LLCA provides that the majority of the members of the board of managers of
VillageMD are to be designated by the Company and certain of its subsidiaries.
The Seventh A&R LLCA further provides that the board of managers of VillageMD
form a committee to approve and execute an initial public offering of the equity
securities of VillageMD, with pricing thereof to occur in 2022, subject to
certain exceptions.
The foregoing description of the Seventh A&R LLCA does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Seventh A&R LLCA, which is filed as Exhibit 10.1 hereto and is incorporated
herein by reference.
Appointment and Waiver Agreement
On November 24, 2021, also in connection with the consummation of the
Transaction, the Company, Walgreens and VillageMD entered into an Appointment
and Waiver Agreement (the "Appointment and Waiver Agreement"). Pursuant to the
terms and subject to the conditions of the Appointment and Waiver Agreement,
VillageMD waived the satisfaction of the condition to its obligations to
consummate the Transaction that one member of the board of managers of VillageMD
be appointed to the board of directors of the Company (the "Board of Directors")
effective no later than the consummation of the Transaction, as contemplated by
the Unit Purchase Agreement. Rather, the Appointment and Waiver Agreement
provides that the Company will appoint one member of the board of managers of
VillageMD to the Board of Directors following the consummation of the
Transaction. Such appointee will be selected by certain founding members of
VillageMD, and is subject to the approval of the Nominating and Governance
Committee of the Board of Directors. If the initial proposed appointee selected
by such founding members of VillageMD is approved by the Nominating and
Governance Committee of the Board of Directors and the Board of Directors, the
Company will add such appointee to the Board of Directors no later than
January 31, 2022.
The foregoing description of the Appointment and Waiver Agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Appointment and Waiver Agreement, which is filed as Exhibit 10.2
hereto and is incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
10.1 Seventh Amended and Restated Limited Liability Company Agreement of
Village Practice Management Company, LLC, dated as of November 24,
2021, by and among Village Practice Management Company, LLC and its
members*
10.2 Appointment and Waiver Agreement, dated as of November 24, 2021, by
and among Walgreens Boots Alliance, Inc., WBA Acquisition 5, LLC and
Village Practice Management Company, LLC
104 Cover Page Interactive Data File (formatted as inline XBRL)
* Certain schedules and exhibits to this agreement have been omitted pursuant to
Items 601(a)(5) of Regulation S-K, and Walgreens Boots Alliance, Inc. agrees to
furnish supplementally to the Securities and Exchange Commission a copy of any
omitted schedule and/or exhibit upon request.
Cautionary Note Regarding Forward-Looking Statements
All statements in this report that are not historical including, without
limitation, those regarding the anticipated effects of the Transaction, the
transactions contemplated by the Seventh A&R LLCA, including the potential
initial public offering of the equity securities of VillageMD, and the actions
contemplated by the Appointment and Waiver Agreement, are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as "expect," "likely," "outlook,"
"forecast," "preliminary," "pilot," "project," "intend," "plan," "goal,"
"target," "aim," "continue," "believe," "seek," "anticipate," "upcoming," "may,"
"possible," and variations of such words and similar expressions are intended to
identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and
are subject to risks, uncertainties and assumptions, known or unknown, that
could cause actual results to vary materially from those indicated or
anticipated. These risks, assumptions and uncertainties include those described
in Item 1A (Risk Factors) of our Annual Report on Form 10-K for the fiscal year
ended August 31, 2021 and in other documents that we file or furnish with the
Securities and Exchange Commission. If one or more of these risks or
uncertainties materializes, or if underlying assumptions prove incorrect, actual
results may vary materially from those indicated or anticipated by such
forward-looking statements. All forward-looking statements we make or that are
made on our behalf are qualified by these cautionary statements. Accordingly,
you should not place undue reliance on these forward-looking statements, which
speak only as of the date they are made.
We do not undertake, and expressly disclaim, any duty or obligation to update
publicly any forward-looking statement after the date of this release, whether
as a result of new information, future events, changes in assumptions or
otherwise.
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