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.