EXHIBIT 99.1
Gorsek's Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Dodge LLP Draft of 3/16/2010
Privileged & Confidential
Attorney-Client Communication
STOCK PURCHASE AGREEMENT
This Agreement (this "Agreement"), dated as of March 23, 2010, is by and
among Great Hill Equity Partners III, L.P. and Great Hill Equity Partners IV,
L.P. (each a "Buyer" and collectively, the "Buyers") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Seller").
WHEREAS, the Seller owns 4,787,788 shares (the "Shares") of common stock,
par value $0.00001 per share (the "Common Stock"), of ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a
StateplaceDelaware corporation ("Vitacost"), and the Buyers desire to purchase
the Shares.
WHEREAS, Vitacost announced on February 18, 2010 its financial
results for the fourth quarter and year ended December 31, 2009 ("Year End
Release") and is required to file an annual report on Form 10-K with the
Securities and Exchange Commission by no later than March 31, 2010.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants, agreements and terms and conditions contained herein and
intending to be legally bound, the parties hereto agree as follows:
Section 1. Purchase and Sale of Common Stock
(a) Purchase. On the terms and subject to the conditions set forth in this
Agreement, concurrently with the execution of this Agreement, the Buyers shall
purchase the Shares from the Seller, and the Seller shall sell the Shares to the
Buyers, for $11.25 per Share, constituting an aggregate purchase price equal to
$53,862,615 (collectively, the "Purchase Price").
(b) Closing. Concurrently with the execution of this Agreement, the Buyers
shall pay and deliver to the Seller the Purchase Price by wire transfer of
immediately available funds pursuant to the wire transfer instructions set forth
on Schedule A, and the Seller shall transfer the Shares to [a DTC participant
account]1 designated by the Buyers, with a portion of the Shares (as determined
at the sole discretion of the Buyers) being transferred to Great Hill Equity
Partners III, L.P. and the remaining balance of the Shares being transferred to
Great Hill Equity Partners IV, L.P.
Section 2. Representations, Warranties and Agreements
(a) Each of the Buyers, as one party, and the Seller, as the other party,
hereby makes the following representations and warranties to each other:
(i) It has the full power and authority to enter into this Agreement
and to consummate the transaction contemplated hereby (and, in the case of
each of the Buyers, it is a duly organized limited partnership, validly
existing and in good standing under the laws of its jurisdiction of
organization).
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1 Subject to confirmation with issuer's counsel and Seller's broker.
(ii) This Agreement is a valid and binding agreement, enforceable
against such party in accordance with its terms, subject to bankruptcy and
similar laws and to equitable principles.
(b) Seller hereby represents and warrants to the Buyers that:
(i) Seller has good and valid title to the Shares owned by him, free
and clear of all liens, encumbrances or claims.
(ii) Upon delivery of the Shares to be sold by the Seller, payment
therefor pursuant hereto and assuming the Buyers have no notice of any
"adverse claim" (within the meaning of Section 8-102 of the Uniform
Commercial Code (the "UCC")) (x) each Buyer shall be a "protected
purchaser" of such Shares within the meaning of Section 8-303 of the UCC,
and (y) under Section 8-501 of the UCC, each Buyer will acquire good and
valid title and a valid security entitlement in respect of such Shares free
of any "adverse claims" (within the meaning of Section 8-102 of the UCC).
(iii) The execution, delivery and performance of this Agreement by
Seller and the consummation by Seller of the transactions contemplated
hereby do not and will not (x) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement, license or
other agreement or instrument to which Seller is a party or by which Seller
is bound or to which any of the property or assets of Seller is subject, or
(y) result in any violation of any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over Seller
or the property or assets of Seller.
(iv) Except for filings by the Seller under Section 13 and Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), no
consent, approval, authorization or order of, or filing or registration
with, any court or governmental agency or body having jurisdiction over the
Seller or the property or assets of the Seller is required for the
execution, delivery and performance of this Agreement and the consummation
by the Seller of the transactions contemplated hereby.
(v) Seller represents that it has not conducted any general
solicitation for offerees with respect to the Shares.
(c) Each Buyer hereby represents and warrants to the Seller that:
(i) Each Buyer understands that the Shares are being purchased under
an exemption from the Securities Act of 1933, as amended (the "Securities
Act"), and that the Shares constitute "restricted securities," as such term
is defined in Rule 144 under the Securities Act, have not been registered
under the Securities Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred without registration under
the Securities Act and applicable state securities laws or an exemption
therefrom.
(ii) Each Buyer is an "Accredited Investor" as such term is defined in
Rule 501 of Regulation D of the Securities Act and is acquiring the Shares
for its own account for investment only and not with a view towards, or for
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resale in connection with, the public sale or distribution thereof. Neither
Buyer has any agreement or understanding, directly or indirectly, with any
person to distribute any of the Shares.
(iii) The execution, delivery and performance of this Agreement by
each Buyer and the consummation by each Buyer of the transactions
contemplated hereby do not and will not (x) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement,
license or other agreement or instrument to which such Buyer is a party or
by which such Buyer is bound or to which any of the property or assets of
such Buyer is subject, or (y) result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Buyer or the property or assets of such
Buyer.
(d) All the representations, warranties and agreements of each party hereto
shall survive the Closing Date.
Section 3. General Release and Standstill Covenant
(a) General Release. Seller, in his capacity as a former employee and
stockholder of Vitacost and as the Seller under this Agreement, hereby releases,
acquits, satisfies and forever discharges Buyers, Vitacost, and all of Buyers'
and Vitacost's current and former officers, directors, employees, agents,
representatives, predecessors, successors, investors, partners, affiliates,
vendors, customers and insurers (and each of their respective heirs, successors
and descendants) from any and all claims, demands, liabilities, promises,
contracts, suits, debts, covenants, controversies, agreements and causes of
action of any kind whatsoever, whether now known or unknown, whether currently
existing or that will arise in the future, arising out of or relating to actions
or failures to act from the beginning of time to the effective date of this
Agreement. Seller hereby expressly acknowledges that Vitacost and all of Buyers'
and Vitacost's current and former officers, directors, employees, agents,
representatives, predecessors, successors, investors, partners, affiliates,
vendors, customers and insurers (and each of their respective heirs, successors
and descendants) are third party beneficiaries to this Section 3(a) and have all
rights of enforcement with respect thereto.
(b) Standstill. The Seller hereby agrees that he shall not:
(i) acquire, offer or propose to acquire, or agree to acquire (except
by way of stock dividends, stock splits, reverse stock splits or other
distributions or offerings made available to holders of any voting
securities generally), whether by purchase, tender or exchange offer,
through the acquisition of control of another person, by joining a
partnership, limited partnership, syndicate or other group (as defined
under Section 13(d) of the Exchange Act) or otherwise, any voting
securities if, as a result of such acquisition, the Seller would
beneficially own in the aggregate more than 1.0% of the then outstanding
voting securities;
(ii) make, participate in or encourage any "solicitation" (as such
term is used in the proxy rules of the SEC) of proxies or consents with
respect to the election or removal of directors or any other matter or
proposal or seek to advise, encourage or influence any person with respect
to the voting of any voting securities;
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(iii) initiate, propose or otherwise "solicit" (as such term is used
in the proxy rules of the SEC) shareholders of Vitacost for the approval of
any shareholder proposal or cause or encourage any person to initiate any
such shareholder proposal; or seek to call, or to request the call of, or
call a special meeting of the shareholders of Vitacost; or make a request
for a list of Vitacost's shareholders or other Vitacost records;
(iv) seek election or appointment to, or representation on, or
nominate or propose the nomination of any candidate to the board of
directors; or seek the removal of any member of Vitacost's board of
directors;
(v) form or join in a partnership, limited partnership, syndicate or
other group, including, without limitation, a group as defined under
Section 13(d) of the Exchange Act, with respect to any voting securities,
or deposit any voting securities into a voting trust or subject any voting
securities to any voting agreement;
(vi) act alone or in concert with others to control or seek to
control, or influence or seek to influence, the management, the board of
directors or the policies of Vitacost;
(vii) with respect to Vitacost or the voting securities, (i) otherwise
communicate with Vitacost's shareholders or others pursuant to Rule
14a-1(l)(2)(iv) under the Exchange Act or (ii) participate in, or take any
action pursuant to, any "shareholder access" proposal that may be adopted
by the SEC, whether in accordance with proposed Rule 14a-11 or otherwise;
(viii) seek, propose, or make any statement with respect to any
merger, consolidation, business combination, tender or exchange offer, sale
or purchase of assets, sale or purchase of securities, dissolution,
liquidation, restructuring, recapitalization or similar transactions of or
involving Vitacost or any of its affiliates or associates (as defined under
Rule 12b-2 of the Exchange Act);
(ix) have any discussions or communications, or enter into any
arrangements, understanding or agreements (whether written or oral) with,
or advise, finance, assist or encourage, any other person in connection
with any of the foregoing, or make any investment in or enter into any
arrangement with any other person that engages, or offers or proposes to
engage, in any of the foregoing; or
(x) otherwise take, or solicit, cause or encourage others to take, any
action inconsistent with any of the foregoing.
Seller hereby expressly acknowledges that Vitacost is a third party beneficiary
to this Section 3(b) and have all rights of enforcement with respect thereto.
Section 4. Miscellaneous
(a) Further Assurances. Each party hereto shall properly execute and
deliver such further agreements and instruments, and take such further actions,
as the other party may reasonably request in order to carry out the purposes and
intent of this Agreement.
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(b) Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given (i) when delivery is
made or refused if delivered personally, (ii) upon successful written
confirmation of facsimile transmission (with subsequent letter confirmation by
any other method permitted under this Section), (iii) the next business day, if
by overnight courier, and/or (iv) five days after being mailed by certified or
registered mail, postage prepaid, return receipt requested, in each case, to the
parties, their successors in interest or their assignees at the following
addresses, or at such other addresses as the parties may designate by written
notice in the manner aforesaid:
If to the Seller: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ #▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax:
With a copy to:
Attention:
Tel:
Fax:
If to Buyers: Great Hill Partners
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(c) Assignability and Parties in Interest. This Agreement shall not be
assignable by any of the parties hereto without the consent of the other parties
hereto, except that the Buyers shall be able to assign their rights and
obligations hereunder to any affiliated entity subject to remaining liable
hereunder for such affiliated entities' obligations under this Agreement.
(d) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal substantive law, and not the law
pertaining to conflicts of law, of the State of New York.
(e) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument. Any delivery of an executed counterpart of this
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Agreement (or counterpart signature page) by facsimile or electronic mail in PDF
format shall be as effective as delivery of a manually executed counterpart (or
counterpart signature page) of this Agreement.
(f) Complete Agreement. This Agreement is an integrated agreement
containing the entire agreement, and all representations, warranties, covenants
and understandings, between the parties hereto with respect to the subject
matter hereof and shall supersede all previous and all contemporaneous oral or
written negotiations, commitments or understandings. Except as specifically set
forth in this Agreement, neither the Seller nor the Buyers makes any
representation, warranty, covenant or undertaking with respect to the subject
matter hereof.
(g) Modifications, Amendments and Waiver. This Agreement may be modified,
amended or otherwise supplemented or terminated only by a writing signed by each
of the parties to this Agreement. No waiver of any right or power hereunder
shall be deemed effective unless and until a writing waiving such right or power
is executed by the party waiving such right or power.
(h) Third Party Beneficiaries. Except as set forth in Section 3 of this
Agreement, there are no third party beneficiaries under this Agreement.
(i) Expenses. Each party hereto shall bear its own costs and expenses,
including, without limitation attorneys' fees, incurred in connection with this
Agreement and the transactions contemplated hereby.
(j) Confidentiality. The parties agree to keep the existence and subject
matter of this Agreement confidential and not disclose it, unless required by
law (in which case the disclosing party shall give the other party advance
notice and opportunity to review the disclosure, and consider in good faith any
reasonable comments thereto). Specifically, the Seller agrees to use reasonable
efforts to provide the Buyers with at least one business day to review any
proposed disclosure relating to this Agreement and/or any sale of the Shares
contemplated hereby in any Seller filing under Section 13 and Section 16 of the
Exchange Act (e.g., amendment of a Schedule 13G or Form 4).
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, each of the Buyers and the Seller has caused this
Agreement to be signed by their respective duly authorized officers as of the
date first written above.
BUYERS:
Great Hill Equity Partners III, L.P.
by: Great Hill Partners GP III, L.P., its general partner
by: GHP III, LLC, its general partner
by:________________, a manager
Great Hill Equity Partners IV, L.P.
by: Great Hill Partners ▇▇ ▇▇, L.P., its general partner
by: GHP IV, LLC, its general partner
by:________________, a manager
[First Signature Page to the Stock Purchase Agreement]
SELLER:
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Second and Final Signature Page to the Stock Purchase Agreement]
SCHEDULE A
WIRE TRANSFER INSTRUCTIONS