Exhibit 10.24
XXXXXXXXX.XXX, INC.
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SERIES E PREFERRED STOCK PURCHASE AGREEMENT
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This Series E Preferred Stock Purchase Agreement (this "Agreement") is made
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as of June 17, 1999 by and among xxxxxxxxx.xxx, inc., a Delaware corporation
(the "Company"), and the investors listed on Schedule I attached hereto (each a
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"Purchaser" and together the "Purchasers").
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The parties hereby agree as follows:
1. Purchase and Sale of Preferred Stock.
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1.1 Sale and Issuance of Series E Preferred Stock.
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(a) The Company shall adopt and file with the Secretary of
State of the State of Delaware on or before the Closing (as defined below) the
Sixth Amended and Restated Certificate of Incorporation in the form attached
hereto as Exhibit A (the "Restated Certificate"); provided, that if any
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additional series of Preferred Stock is authorized or issued after the date of
this Agreement (after receiving requisite Company Stockholder approval,
including the approval of the Purchasers to the extent such approval would be
required for such an issuance if it occurred after the Closing) and prior to the
Closing, the Restated Certificate shall include the terms thereof.
(b) Subject to the terms and conditions of this Agreement, each
of the Purchasers agrees to purchase and the Company agrees to sell and issue to
such Purchaser that number of shares of Series E Preferred Stock, par value
$0.001, of the Company, listed opposite such Purchaser's name on Schedule I in
consideration of the payment by each Purchaser of the amount of cash
consideration listed opposite such Purchaser's name and the execution and
delivery by each Purchaser of the Transaction Agreements (as defined below) to
which such Purchaser is a party (collectively, the "Consideration"). The shares
of Series E Preferred Stock issued to the Purchasers pursuant to this Agreement
are hereinafter referred to as the "Series E Preferred Shares."
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(c) The Series E Preferred Shares shall have the rights,
privileges, preferences and restrictions as set forth in the Restated
Certificate.
(d) The parties hereto acknowledge that the Company has filed
with the Securities and Exchange Commission (the "SEC") a registration statement
on Form S-1 (the "Registration Statement") in connection with the initial public
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offering (the "IPO") of the Company's Common Stock. The parties hereto agree
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that if the IPO shall have been consummated prior to the Closing, each Purchaser
shall receive, in exchange for the Consideration, such number of shares of
Common Stock issuable upon conversion of the number of Series E Preferred Shares
listed opposite such Purchaser's name on Schedule I in accordance with the terms
of the Series E Preferred Stock set forth in the Restated Certificate. The term
"Stock" shall mean either the shares of Common Stock or the Series E Preferred
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Shares issued under this Agreement, as the case may be. The parties hereto
further agree that, for purposes of the representations, warranties, covenants,
agreements, conditions and other provisions contained in this Agreement, if the
IPO shall have been consummated prior to the Closing, such representations,
warranties, covenants, agreements and conditions shall be deemed to have been
amended to give effect to the consummation of the IPO and the conversion of the
Series E Preferred Stock into Common Stock and the related change in
capitalization of the Company.
1.2 Closing; Delivery.
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(a) The purchase and sale of the Stock shall take place at the
offices of Cravath, Swaine & Xxxxx no later than 5 business days after the
satisfaction or (subject to applicable law) waiver of the conditions set forth
in Sections 4 and 5 (excluding conditions that, by their terms, cannot be
satisfied until the Closing) (which time and place are designated as the
"Closing").
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(b) At the Closing, the Company shall deliver to each Purchaser
a certificate or certificates for the number of shares of the Stock to be
purchased by such Purchaser pursuant to this Agreement against delivery of the
Consideration therefor (in the case of cash consideration, by wire transfer of
immediately available funds to the Company's bank account).
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Purchaser that, subject to Section 1.1(d):
2.1 Capitalization.
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(a) Upon the filing of the Restated Certificate, the authorized
capital of the Company will consist of 50,000,000 shares of Preferred Stock,
100,000,000 shares of Serial Preferred Stock and 250,000,000 shares of Common
Stock.
(b) As of the date of this Agreement, (i) 10,000,000 of the
shares of Preferred Stock have been designated Series A Preferred Stock, all of
which are issued and outstanding, (ii) 5,500,000 of the shares of Preferred
Stock have been designated Series B Preferred Stock, 5,446,268 of which are
issued and outstanding, (iii) 5,000,000 of the shares of Preferred Stock have
been designated Series C Preferred Stock, of which 4,472,844 are issued and
outstanding and (iv) 2,300,000 of the shares of Preferred Stock have been
designated Series D Preferred Stock, none of which (other than 2,266,289 shares
which may be issued in exchange for notes issued pursuant to the Series D
Preferred Stock and Convertible Note Purchase Agreement dated as of May 18, 1999
between the Company and the investors party thereto) are issued and outstanding.
All of the outstanding shares of Preferred Stock have been, and when issued and
paid for in accordance with the terms of this Agreement the Series E Preferred
Shares will be, duly authorized, fully paid and are nonassessable, issued in
compliance with all applicable federal and state securities laws (in the case of
the issuance of the Series E Preferred Shares, based in part upon the
representations of the Purchasers in Sections 3.4, 3.5, 3.6, 3.7, 3.8 and 3.9),
and convertible into Common Stock on a one-for-one basis.
(c) As of the date of this Agreement, no shares of Serial
Preferred Stock are issued and outstanding.
(d) As of the date of this Agreement, 2,323,000 shares of Common
Stock are issued and outstanding and 4,235,000 shares of Common Stock are
reserved for issuance under the Company's 1998 Stock Plan (of which 8,000 shares
have been issued pursuant to restricted stock agreements, 39,166 shares are
issuable under outstanding options which are currently exercisable, 3,003,893
shares are issuable under other outstanding options which are not currently
exercisable and 1,183,941 shares remain available for future grants). All of the
outstanding shares of Common Stock have been duly authorized, fully paid and are
nonassessable and
issued in compliance with all applicable federal and state securities laws.
(e) Except for the conversion privileges of the Preferred Stock,
and except as set forth in (i) the Fourth Amended and Restated Investors' Rights
Agreement dated as of May 18, 1999 among the Company and the parties listed on
Exhibit A thereto (the "Investors' Rights Agreement"), (ii) the letter agreement
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dated May 19, 1999 between the Company and Xxxxxx.xxx, Inc., (iii) the warrant
to purchase 10,000 shares of Common Stock issued on February 1, 1999, and (iv)
the service agreement with Xxxxx Xxxx Xxxxxx pursuant to which the Company has
agreed to grant him a currently exercisable option to purchase 8,000 shares of
Common Stock, as of the date of this Agreement there are no outstanding options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal or similar rights) or agreements, oral or in writing, for the purchase
or acquisition from the Company of any shares of its capital stock.
(f) The Stock shall constitute 33 1/3% of all shares of Common
Stock outstanding as of the date of this Agreement, assuming (i) all shares of
Preferred Stock outstanding as of the date of this Agreement have been converted
into Common Stock, (ii) all warrants for Common Stock outstanding as of the date
of this Agreement have been exercised for Common Stock, (iii) all options for
Common Stock outstanding as of the date of this Agreement which are exercisable
as of the date of this Agreement have been exercised for Common Stock and (iv)
all other rights outstanding as of the date of this Agreement which are
exercisable as of the date of this Agreement to acquire Common Stock or
securities convertible into Common Stock have been exercised for or converted
into Common Stock other than, in each case, the right of Xxxxxx.xxx, Inc. to
purchase Common Stock upon the consummation of the IPO pursuant to the letter
agreement dated May 19, 1999.
(g) As of the date of this Agreement, the Company's sole
subsidiary is DS Pharmacy, Inc.
2.2 Authorization. All corporate action on the part of the Company,
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its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Addendum to the Investors' Rights
Agreement dated as of June 17, 1999, among the Company, the Purchasers and the
other parties listed on Exhibit A thereto (the "Addendum to Investors' Rights
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Agreement"), the Third Amended and Restated Voting Agreement dated as of June
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17, 1999, among the Company, the Purchasers and the other parties listed on
Exhibit A
thereto, (the "Voting Agreement"), the Governance Agreement dated as of June 17,
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1999, between the Company and Rite Aid Corporation (the "Rite Aid
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Governance Agreement") and the Governance Agreement dated as of June 17, 1999,
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between the Company, General Nutrition Companies, Inc. and General Nutrition
Investment Company (the "GNC Governance Agreement", and collectively with the
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Addendum to Investors' Rights Agreement, the Voting Agreement, the Rite Aid
Governance Agreement and this Agreement, the "Agreements" and, together with the
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Main Agreement dated as of June 17, 1999, between the Company and Rite Aid
Corporation (the "Rite Aid Main Agreement"), the Pharmacy Supply and Services
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Agreement dated as of June 17, 1999, between the Company and Rite Aid
Corporation (the "Pharmacy Supply and Services Agreement"), the PCS Provider
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Agreement dated as of June 17, 1999, between the Company and PCS Health Systems,
Inc., the Eagle Provider Agreement dated as of June 17, 1999, between the
Company and Eagle Managed Care, the Addendum to the Provider Agreements among
the Company, Rite Aid Corporation, PCS Health Systems, Inc. and Eagle Managed
Care, the Main Agreement dated as of June 17, 1999, between the Company and
General Nutrition Companies, Inc. (the "GNC Main Agreement"), and the
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Consignment Agreement dated as of June 17, 1999, between the Company and General
Nutrition Sales Corporation, the "Transaction Agreements"), the performance of
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all obligations of the Company hereunder and thereunder and the authorization,
issuance and delivery of the Stock has been taken or will be taken prior to the
Closing, and the Agreements, when executed and delivered by the Company, will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and other laws of general application affecting enforcement of
creditors' rights generally, as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies, or (ii) to
the extent the indemnification provisions contained in the Investors' Rights
Agreement may be limited by applicable federal or state securities laws.
2.3 Valid Issuance of Stock. The Stock that will be issued to the
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Purchaser at Closing will have been duly and validly reserved for issuance and,
when issued and delivered in accordance with the terms hereof, will be duly and
validly issued and free of restrictions on transfer other than restrictions on
transfer under this Agreement, the Main Agreement, the Rite Aid Governance
Agreement, the GNC Governance Agreement, the Addendum to Investors' Rights
Agreement and applicable state and federal securities laws. Based in part upon
the
representations of the Purchasers in this Agreement, the Stock will be
issued in compliance with all applicable federal and state securities laws. The
Common Stock issuable upon conversion of the Series E Preferred Stock has been
duly and validly reserved for issuance, and upon issuance in accordance with the
terms of the Restated Certificate, will be duly and validly issued, fully paid
and nonassessable and free of restrictions on transfer other than restrictions
on transfer under this Agreement, the Governance Agreement, the Investors'
Rights Agreement and applicable federal and state securities laws and will be
issued in compliance with all applicable federal and state securities laws.
2.4 Litigation. There is no action, suit, proceeding or investigation
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pending or, to the Company's knowledge, currently threatened against the Company
or any of its subsidiaries that questions the validity of the Transaction
Agreements or the right of the Company or any of its subsidiaries, as
applicable, to enter into them, or to consummate the transactions contemplated
hereby or thereby nor is the Company aware that there is any basis for the
foregoing. Neither the Company nor any of its subsidiaries is a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality that challenges the validity
of the Transaction Agreements or the right of the Company or any of its
subsidiaries, as applicable, to enter into them, or to consummate the
transactions contemplated thereby.
2.5 Liabilities. The Company and its subsidiaries, on a consolidated
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basis, have no material liabilities and, to the best of the Company's knowledge,
there are no material contingent liabilities, required by generally accepted
accounting principles to be disclosed on a balance sheet but which are not
disclosed on the Company's audited balance sheet as of December 31, 1998 and/or
on the Company's unaudited balance sheet as of March 31, 1999, except
liabilities incurred in the ordinary course of business subsequent to March 31,
1999 that would not have a material adverse effect on the properties, assets,
financial condition or results of operations of the Company and its subsidiaries
on a consolidated basis.
2.6 Compliance with Other Instruments. The execution, delivery and
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performance of the Agreements and the consummation of the transactions
contemplated thereby will not result in any violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any provision of the Restated Certificate or the bylaws of the
Company or any instrument, judgment, order, writ, decree or contract
to which the Company or any of its subsidiaries is a party or by which it is
bound, or any provision of any federal or state statute, rule or regulation
applicable to the Company or any of its subsidiaries, the effect of which would
have a material adverse effect on the ability of the Company and its
subsidiaries to perform their respective obligations under the Agreements or
result in the creation of any lien, charge or encumbrance upon any assets of the
Company or any of its subsidiaries.
2.7 Investor Agreements. The Company has filed with the SEC or
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listed on the Schedule of Exceptions (and, in the case of agreements listed on
the Schedule of Exceptions, provided the Purchasers with copies of) all
agreements in existence as of the date of this Agreement that define or affect
the rights of security holders of the Company in their capacity as security
holders including, but not limited to, such security holders' voting rights,
registration rights or standstill rights or obligations.
3. Representations and Warranties of the Purchasers. Each Purchaser
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hereby represents and warrants to the Company that:
3.1 Authorization. All corporate action on the part of the
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Purchaser, its officers, directors and stockholders necessary for the
authorization, execution and delivery of the Agreements, the performance of all
obligations of the Purchaser thereunder has been taken or will be taken prior to
the Closing, and the Agreements to which the Purchaser is a party, when executed
and delivered by the Purchaser will constitute valid and legally binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors' rights generally, as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies, or (ii) to the extent the indemnification provisions
contained in the Investors' Rights Agreement may be limited by applicable
federal or state securities laws.
3.2 Litigation. There is no action, suit, proceeding or investigation
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pending or, to the Purchaser's knowledge, currently threatened against the
Purchaser or any of its subsidiaries that questions the validity of the
Transaction Agreements or the right of the Purchaser or any of its subsidiaries,
as applicable, to enter into them, or to consummate the transactions
contemplated hereby or thereby nor is the Purchaser aware
that there is any basis for the foregoing. Neither the Purchaser nor any of its
subsidiaries is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality that challenges the validity of the Transaction Agreements or
the right of the Purchaser or any of its subsidiaries, as applicable, to enter
into them, or to consummate the transactions contemplated hereby or thereby.
3.3 Compliance with Other Instruments. The execution, delivery and
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performance of the Agreements and the consummation of the transactions
contemplated thereby will not result in any violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any provision of the certificate of incorporation or bylaws or any
instrument, judgment, order, writ, decree or contract to which the Purchaser or
any of its subsidiaries is a party or by which it is bound, or any provision of
any federal or state statute, rule or regulation applicable to the Purchaser or
any of its subsidiaries, the effect of which would have a material adverse
effect on the ability of the Purchaser and its subsidiaries to perform their
respective obligations under the Agreements or result in the creation of any
lien, charge or encumbrance upon any assets of the Purchaser or any of its
subsidiaries.
3.4 Purchase Entirely for Own Account. This Agreement is made with
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the Purchaser in reliance upon the Purchaser's representation to the Company,
which by the Purchaser's execution of this Agreement, the Purchaser hereby
confirms, that the Stock to be acquired by the Purchaser will be acquired for
investment for the Purchaser's own account, not as a nominee or agent, and not
with a view to the resale or public distribution of any part thereof in
violation of any requirements of the Securities Act or applicable state
securities laws, and that the Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, the Purchaser further represents that the Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person or to any third
person, with respect to any of the Stock.
3.5 Disclosure of Information. The Purchaser (i) has had an
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opportunity to discuss the Company's business, management, financial affairs and
the terms and conditions of the offering of the Stock with the Company's
management, (ii) has had an opportunity to review the Company's facilities and
(iii) has reviewed the Registration Statement. The Purchaser understands
that such discussions and reviews, as well as any written information delivered
by the Company to the Purchaser, were intended to describe the aspects of the
Company's business that it believes to be material.
3.6 Restricted Securities. The Purchaser understands that the Stock
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has not been, and will not be, registered under the Securities Act, by reason of
a specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Purchaser's representations as expressed herein.
The Purchaser understands that the Stock are "restricted securities" under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, the Purchaser must hold the Stock indefinitely unless they are registered
with the Securities and Exchange Commission and qualified by state authorities,
or an exemption from such registration and qualification requirements is
available. The Purchaser acknowledges that the Company has no obligation to
register or qualify the Stock for resale except as set forth in the Investors'
Rights Agreement. The Purchaser further acknowledges that if an exemption from
registration or qualification is available, it may be conditioned on various
requirements including, but not limited to, the time and manner of sale, the
holding period for the Stock, and on requirements relating to the Company that
are outside of the Purchaser's control, and which the Company is under no
obligation, and may not be able, to satisfy.
3.7 No Public Market. The Purchaser understands that no public market
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now exists for any of the securities issued by the Company, and that the Company
has made no assurances that a public market will ever exist for the Stock.
3.8 Legends. The Purchaser understands that the Stock, and any
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securities issued in respect thereof, may bear one or all of the following
legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933."
(b) Any legend set forth in the other Agreements.
(c) Any legend required by the "Blue Sky" laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
3.9 Accredited Investor. The Purchaser is an accredited investor as
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defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
4. Conditions of the Purchasers' Obligations at Closing. The obligations
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of the Purchasers to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
4.1 Representations and Warranties. The representations and
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warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the date of the Closing with the same effect
as though such representations and warranties had been made on and as of the
date of the Closing (except to the extent such representations and warranties
speak as of the date of this Agreement, in which case they shall be true and
correct in all material respects on and as of the date of this Agreement).
4.2 Performance. The Company shall have performed and complied with
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all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing and the Company shall have obtained any and all consents, permits
and waivers necessary or appropriate for consummation of the transactions
contemplated by the Agreements.
4.3 Reservation of Conversion Shares. The Stock issuable pursuant to
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this Agreement and, if Series E Preferred Shares are to be issued pursuant to
this Agreement, the Common Stock issuable upon conversion of the Series E
Preferred Shares shall have been duly authorized and reserved for issuance at
the Closing or upon conversion, respectively.
4.4 Compliance Certificate. The President of the Company shall
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deliver to the Purchasers at the Closing a certificate certifying that the
conditions specified in Sections 4.1, 4.2 and 4.3 have been fulfilled.
4.5 Qualifications. All authorizations, approvals or permits, if any,
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of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful
issuance and sale of the Stock pursuant to this Agreement shall be obtained and
effective as of the Closing including, without limitation, the expiration or
termination of all waiting periods under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976, as amended (the "HSR Act").
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4.6 Opinion of Company Counsel. The Purchasers at the Closing shall
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have received from Cravath, Swaine & Xxxxx, counsel for the Company, an opinion
dated as of the Closing in substantially the form of Exhibit B.
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4.7 The Agreements. The Company, each Purchaser and the other parties
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thereto shall have executed and delivered each of the Transaction Agreements to
which they are a party.
4.8 Restated Certificate. The Company shall have filed the Restated
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Certificate with the Secretary of State of Delaware on or prior to the Closing,
which shall continue to be in full force and effect as of the Closing.
5. Conditions of the Company's Obligations at Closing. The obligations of
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the Company to the Purchasers under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
5.1 Representations and Warranties. The representations and
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warranties of the Purchasers contained in Section 3 shall be true and correct in
all material respects on and as of the date of the Closing with the same effect
as though such representations and warranties had been made on and as of the
date of the Closing (except to the extent such representations and warranties
speak as of the date of this Agreement, in which case they shall be true and
correct in all material respects on and as of the date of this Agreement).
5.2 Performance. All covenants, agreements and conditions contained
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in this Agreement to be performed by the Purchasers on or prior to the Closing
shall have been performed or complied with in all material respects.
5.3 Compliance Certificate. A senior executive officer of each of the
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Purchasers shall deliver to the Company at the Closing a certificate certifying
that the conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.4 Qualifications. All authorizations, approvals or permits, if any,
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of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Stock pursuant to this Agreement shall be obtained and effective as of the
Closing including, without limitation, the expiration or termination of all
waiting periods under the HSR Act.
5.5 The Agreements. The Company, each Purchaser and the other parties
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thereto shall have executed and delivered each of the Transaction Agreements to
which they are a party.
5.6 Restated Certificate. The Company shall have filed the Restated
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Certificate with the Secretary of State of Delaware on or prior to the Closing,
which shall continue to be in full force and effect as of the Closing.
6. Covenant.
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6.1 HSR Act Filings. As soon as practicable after the execution of
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this Agreement, the Company and each Purchaser will separately file with the
Antitrust Division of the United States Department of Justice and the United
States Federal Trade Commission pursuant to the HSR Act all requisite documents
and notifications in order to provide for the issuance and sale of the Stock
pursuant to this Agreement. The parties will cooperate and coordinate with one
another in exchanging information and providing reasonable assistance as the
other party may request in connection with the foregoing.
6.2 Execution of the Transaction Agreements. Each of the Purchasers
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and the Company shall execute and deliver each Transaction Agreement (other than
any Transaction Agreement executed and delivered prior to the Closing) at the
Closing promptly upon the satisfaction or (subject to applicable law) waiver of
the conditions set forth in Sections 4 and 5 (excluding the conditions set forth
in Sections 4.7 and 5.5).
7. Miscellaneous.
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7.1 Survival of Warranties. The warranties and representations of the
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Company or the Purchasers contained in or made pursuant to Sections 2.1, 2.2,
2.3, 2.5, 2.6, 3.1 and 3.3 of this Agreement shall survive the closing of the
transactions contemplated hereby and any investigation made by the Company or
the Purchasers (including, without limitation, any investigation described in
Section 3.5) but shall terminate on the earlier of (i) the consummation of the
IPO and (ii) the tenth business day after the delivery by the Company to the
Purchasers of the Company's audited balance sheet as of December 31, 1999 and
audited statements of income and cash flows for the twelve months ended December
31, 1999. The warranties and representations of the Company contained in or
made pursuant to Section 2.7 of this Agreement shall survive the closing of the
transactions contemplated hereby and any investigation made by the Purchasers
(including, without limitation, any investigation described in Section 3.5) but
shall terminate on the earlier of (i) the consummation of the IPO and (ii)
December 31, 1999. The warranties and representations of the Company or the
Purchasers contained in or made pursuant to Sections 2.4 and 3.2 of this
Agreement shall survive any investigation made by the Company or the Purchasers
(including, without limitation, any investigation described in Section 3.5) but
shall terminate on the Closing.
7.2 Transfer; No Third Party Beneficiaries. This Agreement and each
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party's rights and obligations hereunder shall not be assigned without the prior
written consent of the other party. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
7.3 Governing Law. This Agreement and all acts and transactions
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pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
7.4 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
7.5 Titles and Subtitles. The titles and subtitles used in this
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Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
7.6 Notices. Any notice required or permitted by this Agreement
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shall be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed to the party to be notified at such
party's address as set forth on the signature page hereto, or as subsequently
modified by written notice, and if to the Company, with a copy to the General
Counsel of the Company at the address of the Company set forth below and, if to
Rite Aid Corporation, with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx XXX,
Xxx Xxxx, XX 00000-0000, Attention: Xxxxx Xxxxxxxxx (telephone no: (212) 735-
3000; telecopy no: (000) 000-0000), and if to General Nutrition Companies, Inc.,
with a copy to its General Counsel at its address set forth below.
7.7 Finder's Fee. Each party represents that it neither is nor will
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be obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the
Company from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Purchaser or any of its officers, employees,
or representatives is responsible. The Company agrees to indemnify and hold
harmless each Purchaser from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
7.8 Fees and Expenses. Except as otherwise specifically provided
-----------------
herein, the Company and the Purchasers shall pay their respective fees and other
expenses in connection with the negotiation, execution, delivery and performance
of the Agreements.
7.9 Attorney's Fees. If any action at law or in equity (including
---------------
arbitration) is necessary to enforce or interpret the terms of any of the
Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
7.10 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended or waived only with the written
consent of the Company and each of the Purchasers. Any amendment or waiver
effected in accordance with this Section 7.10 shall be binding upon each
Purchaser and each transferee of the Stock, each future holder of all such
Stock, and the Company.
7.11 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
7.12 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
7.13 Entire Agreement. This Agreement, and the documents referred to
----------------
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing between the parties hereto are
expressly canceled.
7.14 Confidentiality. Except as provided below, each party hereto
---------------
agrees that, except with the prior written permission of the other party, it
shall at all times keep confidential and not divulge, furnish or make accessible
to anyone any confidential information, knowledge or data concerning or relating
to the business or financial affairs of the other party to which such party has
been or shall become privy by reason of the
Agreements, discussions or negotiations relating to the Agreements, the
performance of its obligations thereunder or the ownership of Stock purchased
hereunder. The provisions of this Section 7.14 shall be in addition to, and not
in substitution for, the provisions of any separate nondisclosure agreement
executed by the parties hereto with respect to the transactions contemplated by
the Agreements. Notwithstanding the foregoing, nothing herein shall prevent any
party from disclosing (i) such information which has been publicly disclosed,
(ii) such information which becomes available to the party on a non-confidential
basis from a source other than the other party hereto, provided that such source
is not bound by a confidentiality agreement with such other party, (iii)
information required to be disclosed pursuant to subpoena or other court process
or otherwise required to be disclosed by law or the regulations of any
securities exchange (provided that, to the extent practicable, advance notice is
--------
given to the party whose confidential information is to be disclosed so that
such party can attempt to obtain a protective order) and (iv) such information
which was known to the party prior to its first receipt from the other party.
7.15 Publicity. After the execution of this Agreement, any of the
---------
parties may issue a press release disclosing that the Purchasers have agreed to
invest in the Company and the terms of the future relationship between the
parties in a form approved by the other party, which approval will not be
unreasonably withheld, conditioned or delayed. In addition, any party may
disclose such information regarding the Purchasers' investment and the
relationship between the parties as required by law or the regulations of any
securities exchange.
7.16 Termination. This Agreement may be terminated and the
-----------
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(i) at any time by mutual written consent of the Company and
each of the Purchasers; or
(ii) by any party hereto if the Closing does not occur on or
prior to October 31, 1999; (provided, that if on October 31, 1999 any
--------
authorization, approval or permit of any governmental authority or
regulatory body of the United States or of any state that is required
in connection with the lawful issuance and sale of the Stock pursuant
to this Agreement has not been obtained, then no party shall be
entitled to terminate this Agreement pursuant to this clause (ii) until
December 15, 1999 and then
only if the Closing has not occurred on or prior to such date).
Upon any such termination, this Agreement shall become void and of no further
effect, except for Sections 7.7, 7.8, 7.9, 7.14 and this Section 7.16 which
shall survive such termination.
7.17 GNC. Rite Aid Corporation ("Rite Aid") acknowledges that it was
--- --------
contractually committed to a certain commercial arrangement with General
Nutrition Companies, Inc. ("GNC") prior to negotiation of this Agreement. As
---
consideration for GNC's termination of that arrangement, Rite Aid requested that
the Company sell Series E Preferred Shares to GNC as set forth in this
Agreement.
7.18 Series E Preferred Shares. The Series E Preferred Shares issued
-------------------------
pursuant to this Agreement are fully vested, nonrefundable and non-forfeitable
in the event of a default under any of the Transaction Documents.
[Signature Pages Follow]
The parties have executed this Series E Preferred Stock Purchase Agreement
as of the date first written above.
COMPANY:
XXXXXXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President and CEO
Address: 00000 XX Xxxxxxxx
Xxx, Xxxxx 000
Xxxxxxxx, XX 00000
PURCHASERS:
RITE AID CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Executive V.P.
Address: 00 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
GENERAL NUTRITION COMPANIES, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Signature Page to the Series E Preferred
Stock Purchase Agreement
GENERAL NUTRITION INVESTMENT COMPANY
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Signature Page to the Series E Preferred
Stock Purchase Agreement
SCHEDULE I
----------
Purchaser Number of Shares Cash Consideration
--------- ---------------- ------------------
Rite Aid Corporation 9,334,746 $ 7,599,976.00
General Nutrition Companies, 2,947,853 $ 2,400,024.00
Inc., through its wholly ========== ==============
owned subsidiary General
Nutrition Investment Company
12,282,599 $10,000,000.00
