PREMIER, INC. 3,709,394 Sharesof Class A Common Stock Underwriting Agreement
Exhibit 1.1
PREMIER, INC.
3,709,394 Shares of Class A Common Stock
Underwriting Agreement
November 13, 2014
J.P. MORGAN SECURITIES LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
WELLS FARGO SECURITIES, LLC
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
c/o Wells Fargo Securities, LLC
375 Park Avenue, 4th Floor
New York, New York 10152
Ladies and Gentlemen:
Certain stockholders named in Schedule 2 hereto (the “Selling Stockholders”) of Premier, Inc., a Delaware corporation (the “Company”), propose to sell to the several Underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as representatives (collectively, the “Representatives”), an aggregate of 3,709,394 shares of Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), of the Company (collectively, the “Underwritten Shares”). In addition, the Company proposes to issue and sell, at the option of the Underwriters, up to an additional 370,939 shares of Class A Common Stock of the Company (the “Option Shares”). The Underwritten Shares and the Option Shares are herein referred to as the “Shares”. The shares of Class A Common Stock of the Company to be outstanding after giving effect to the sale of the Shares are referred to herein as the “Stock”.
Prior to the consummation of the offering contemplated by this Agreement, pursuant to the terms of the Exchange Agreement, dated as of September 25, 2013 (the “Exchange Agreement”), among the Company, Premier Healthcare Alliance, L.P., a California limited partnership (the “Operating Partnership”), and the limited partners of the Operating Partnership party thereto, the Selling Stockholders exchanged 4,685,267 Class B common units (the “Class B Units” and, together with the Class A common
units, the “Common Units”) in the Operating Partnership, together with an equivalent number of shares of Class B common stock, par value $0.000001 per share (the “Class B Common Stock”), of the Company, for an equivalent number of shares of Class A Common Stock. The shares of Class A Common Stock received by the Selling Stockholders in connection with such exchange are being sold pursuant to this Agreement.
In connection with the offering contemplated by this Agreement, pursuant to the terms of the Amended and Restated Limited Partnership Agreement of the Operating Partnership, the Company will use any net proceeds from the public offering of the Option Shares to acquire newly-issued Class A common units directly from the Operating Partnership, and will contribute all such Class A common units acquired to Premier Services, LLC, a Delaware limited liability company (the “General Partner”), which is a wholly-owned subsidiary of the Company and the sole general partner of the Operating Partnership.
As used in this Agreement, the term “Premier Entities” (each, individually, a “Premier Entity”) includes the Company and its consolidated subsidiaries.
The Company and the Selling Stockholders hereby confirm their agreement with the several Underwriters concerning the purchase and sale of the Shares, as follows:
1. Registration Statements. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement (File No. 333-199158), including a prospectus, relating to the Underwritten Shares. Such registration statement, as amended at the time it became effective, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of such registration statement at the time of effectiveness (“Rule 430 Information”), is referred to herein as the “Secondary Registration Statement”. The Company has also prepared and filed with the Commission under the Securities Act, a registration statement on Form S-3 (File No. 333-200136), including a prospectus, relating to the Option Shares. Such registration statement, as amended at the time it became effective, including the Rule 430 Information, is referred to herein as the “Primary Registration Statement” and, together with the Secondary Registration Statement, the “Registration Statements”. As used herein, the term “Preliminary Prospectus” means each prospectus included in either Registration Statement (and any amendments thereto) before effectiveness, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in either Registration Statement at the time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectuses in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Shares. If the Company has filed one or more abbreviated registration statements pursuant to Rule 462(b) under the Securities Act (a “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statements” shall be deemed to include such Rule 462 Registration Statement. Any reference in this Agreement to either Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the effective date of the applicable Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be, and any reference to “amend”, “amendment” or “supplement” with respect to either Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by reference therein. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statements and the Prospectus.
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At or prior to the Applicable Time (as defined below), the Company had prepared the following information (collectively with the pricing information set forth on Annex B, the “Pricing Disclosure Package”): a Preliminary Prospectus dated November 12, 2014, and each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex B hereto.
“Applicable Time” means 5:30 P.M., New York City time, on November 13, 2014.
2. Purchase of the Shares by the Underwriters.
(a) Each of the Selling Stockholders agrees, severally and not jointly, to sell the Underwritten Shares to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from each of the Selling Stockholders at a purchase price per share of $30.49 (the “Purchase Price”) the number of Underwritten Shares (to be adjusted by the Representatives so as to eliminate fractional shares) determined by multiplying the aggregate number of Underwritten Shares to be sold by such Selling Stockholder as set forth opposite its name in Schedule 2 hereto by a fraction, the numerator of which is the aggregate number of Underwritten Shares to be purchased by such Underwriter as set forth opposite such Underwriter’s name in Schedule 1 hereto and the denominator of which is the aggregate number of Underwritten Shares to be purchased by all the Underwriters from all of the Selling Stockholders hereunder.
In addition, the Company agrees to issue and sell the Option Shares to the several Underwriters as provided in this Agreement, and the Underwriters, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, shall have the option to purchase, severally and not jointly, from the Company at the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Underwritten Shares but not payable on the Option Shares.
If any Option Shares are to be purchased, the number of Option Shares to be purchased by each Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name of such Underwriter in Schedule 1 hereto (or such number as may be increased as set forth in Section 12 hereof) bears to the aggregate number of Underwritten Shares being purchased from the Selling Stockholders by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares as the Representatives in their sole discretion shall make.
The Underwriters may exercise the option to purchase Option Shares at any time in whole, or from time to time in part, on or before the thirtieth day following the date of the Prospectus, by written notice from the Representatives to the Company. Such notice shall set forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be delivered and paid for, which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date or later than the tenth full business day (as hereinafter defined) after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 12 hereof). Any such notice shall be given at least two business days prior to the date and time of delivery specified therein.
(b) The Company and the Selling Stockholders understand that the Underwriters intend to make a public offering of the Shares as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Shares on the terms set forth in the Prospectus. The Company and the Selling Stockholders acknowledge and agree that the Underwriters may offer and sell Shares to or through any affiliate of an Underwriter.
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(c) Payment for the Shares by the Underwriters shall be made by wire transfer in immediately available funds to the accounts specified by the Company and the Attorneys-in-Fact (as defined below), as applicable, to the Representatives and, in the case of the Underwritten Shares, at the offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New York, New York 10019-7475 at 10:00 A.M., New York City time, on November 19, 2014, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Attorneys-in-Fact, or any one of them, may agree upon in writing or, in the case of the Option Shares, on the date and at the time and place specified by the Representatives in the written notice of the Underwriters’ election to purchase such Option Shares. The time and date of such payment for the Underwritten Shares is referred to herein as the “Closing Date”, and the time and date for such payment for the Option Shares, if other than the Closing Date, is herein referred to as the “Additional Closing Date”.
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Shares to be purchased on such date in definitive form registered in such names and in such denominations as the Representatives shall request in writing not later than two full business days prior to the Closing Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the sale of such Shares duly paid by the Company and the Selling Stockholders, as applicable. Delivery of the Shares shall be made through the facilities of The Depository Trust Company (“DTC”) unless the Representatives shall otherwise instruct. The certificates for the Shares will be made available for inspection and packaging by the Representatives at the office of DTC or its designated custodian not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date or the Additional Closing Date, as the case may be.
(d) The Company, the General Partner, the Operating Partnership and the Selling Stockholders acknowledge and agree that the Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the Company and the Selling Stockholders with respect to the offering of Shares contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company, the General Partner, the Operating Partnership, the Selling Stockholders or any other person. Additionally, neither the Representatives nor any other Underwriter is advising the Company, the General Partner, the Operating Partnership, the Selling Stockholders or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company, the General Partner, the Operating Partnership and the Selling Stockholders shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company, the General Partner, the Operating Partnership or the Selling Stockholders with respect thereto. Any review by the Underwriters of the Company, the General Partner, the Operating Partnership, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company, the General Partner, the Operating Partnership or the Selling Stockholders.
3. Representations and Warranties of the Company, the General Partner and the Operating Partnership. Each of the Company, the General Partner and the Operating Partnership, jointly and severally, represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus included in the Pricing Disclosure Package, at the time of filing thereof, complied in all material respects with the Securities Act; provided that the Company, the General Partner and the
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Operating Partnership make no representation and warranty with respect to (i) any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company, the General Partner or the Operating Partnership in writing by such Underwriter through the Representatives expressly for use in any Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof, or (ii) any Selling Stockholder Information (as defined below).
(b) Pricing Disclosure Package. The Pricing Disclosure Package as of the Applicable Time did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company, the General Partner and the Operating Partnership make no representation and warranty with respect to (i) any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company, the General Partner or the Operating Partnership in writing by such Underwriter through the Representatives expressly for use in such Pricing Disclosure Package, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof, or (ii) any Selling Stockholder Information.
(c) Issuer Free Writing Prospectus. Other than the Registration Statements, the Preliminary Prospectus and the Prospectus, the Company, the General Partner and the Operating Partnership (including their agents and representatives, other than the Underwriters in their capacity as such) have not prepared, used, authorized, approved or referred to and will not prepare, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Shares (each such communication by the Company, the General Partner, the Operating Partnership or their agents and representatives (other than a communication referred to in clause (i) below) an “Issuer Free Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex B hereto, each electronic road show and any other written communications approved in writing in advance by the Representatives. Each such Issuer Free Writing Prospectus complied in all material respects with the Securities Act, has been or will be (within the time period specified in Rule 433 under the Securities Act) filed in accordance with the Securities Act (to the extent required thereby) and, as of the Applicable Time, when taken together with the Preliminary Prospectus accompanying, or delivered prior to delivery of, such Issuer Free Writing Prospectus, did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company, the General Partner and the Operating Partnership make no representation and warranty with respect to (i) any statements or omissions made in each such Issuer Free Writing Prospectus or Preliminary Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company, the General Partner or the Operating Partnership in writing by such Underwriter through the Representatives expressly for use in such Issuer Free Writing Prospectus or Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof, or (ii) any Selling Stockholder Information.
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(d) Emerging Growth Company. From the time of initial filing of each of the Registration Statements with the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company”, as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
(e) Testing-the-Waters Materials. The Company (i) has not alone engaged in any Testing-the-Waters Communications other than Testing-the-Waters Communications with the consent of the Representatives and which have been arranged by the Representatives and (ii) has not authorized anyone to engage in Testing-the-Waters Communications.
(f) Registration Statements and Prospectus. The Secondary Registration Statement has been declared effective by the Commission. The Primary Registration Statement is an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years prior to the date hereof; and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company. No order suspending the effectiveness of either Registration Statement has been issued by the Commission, and no proceeding for those purposes or pursuant to Section 8A of the Securities Act against the Company or related to the offering of the Shares has been initiated or, to the knowledge of the Company, the General Partner or the Operating Partnership, threatened by the Commission; as of the applicable effective date of the Registration Statements and any post-effective amendment thereto, each Registration Statement and any such post-effective amendment complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company, the General Partner and the Operating Partnership make no representation and warranty with respect to (i) any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company, the General Partner or the Operating Partnership in writing by such Underwriter through the Representatives expressly for use in the Registration Statements or the Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof, or (ii) any Selling Stockholder Information.
(g) Incorporated Documents. The documents incorporated by reference in the Registration Statements, the Prospectus and the Pricing Disclosure Package, when they were filed with the Commission complied in all material respects with the requirements of the Exchange Act, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statements, the Prospectus or the Pricing Disclosure Package during the Prospectus Delivery Period (as defined below), when such documents are filed with the Commission, will conform in all material respects to the requirements of the
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Exchange Act and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(h) Financial Statements. The historical financial statements (including the related notes thereto) of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statements, the Pricing Disclosure Package and the Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods covered thereby, and any supporting schedules included or incorporated by reference in the Registration Statements present fairly, in all material respects, the information required to be stated therein; the historical financial information set forth under the captions “Prospectus Supplement Summary”, “Ratio of Earnings to Fixed Charges” and “Exhibit 12.1—Ratio of Earnings to Fixed Charges”, in the sections of the Annual Report on Form 10-K under “Item 1. Business”, “Item 6. Selected Financial Data” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and in the section of the Quarterly Report on Form 10-Q under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included or incorporated by reference in the Registration Statements, the Pricing Disclosure Package and the Prospectus has been derived from the accounting records of the Company and its consolidated subsidiaries and presents fairly in all material respects the information shown thereby; and the pro forma financial information and the related notes thereto included or incorporated by reference in the Registration Statements, the Pricing Disclosure Package and the Prospectus have been prepared in all material respects in accordance with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and the assumptions underlying such pro forma financial information are reasonable and are set forth in the Registration Statements, the Pricing Disclosure Package and the Prospectus.
(i) No Material Adverse Change. Since the date of the most recent financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statements, the Pricing Disclosure Package and the Prospectus, (i) there has not been any change in the capital stock (other than (1) the issuance of shares of Class A Common Stock upon exercise of stock options and the settlement of restricted stock units and performance share awards described as outstanding in, and the grant of options, restricted stock units, performance share awards and other awards under the Company Stock Plans (as defined below) or existing equity incentive plans and (2) the issuance of shares of Class A Common Stock, and the related surrender and cancellation, as applicable, of Class B Units and Class B Common Stock, pursuant to the procedures set forth in Section 2.2 of the Exchange Agreement, in the case of both clauses (1) and (2), each as described in the Registration Statements, the Pricing Disclosure Package and the Prospectus or documents incorporated by reference therein), short-term debt or long-term debt of any of the Premier Entities, or any dividend or distribution of any kind declared, set aside for payment, paid or made by any of the Premier Entities on any class of capital stock other than (A) ordinary and customary dividends or distributions or dividends paid or made by the Operating Partnership, as described or incorporated by reference in the Registration Statements, the Pricing Disclosure Package and the Prospectus, or (B) the redemption of partnership interests of the Operating Partnership as the result of the departure of a limited partner of the Operating Partnership, (ii) there has not been any material
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adverse change in or affecting the business, properties, management, financial position, results of operations or prospects of the Premier Entities taken as a whole, (iii) none of the Premier Entities has entered into any transaction or agreement (whether or not in the ordinary course of business) that is material to the Premier Entities taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Premier Entities taken as a whole, and (iv) none of the Premier Entities has sustained any loss or interference with its business that is material to the Premier Entities taken as a whole and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Registration Statements, the Pricing Disclosure Package and the Prospectus.
(j) Organization and Good Standing. Each of the Company, the Operating Partnership and each “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation S–X) of the Company (each a “significant subsidiary” and, collectively, the “significant subsidiaries”) has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, is duly qualified to do business and is in good standing in each jurisdiction in which its respective ownership or lease of property or the conduct of its business requires such qualification, and has all power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, results of operations or prospects of the Premier Entities taken as a whole or on the performance by the Premier Entities of their obligations under this Agreement (a “Material Adverse Effect”). The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed on Annex E hereto.
(k) Capitalization. The Company has an authorized capitalization as set forth in the Registration Statements, the Pricing Disclosure Package and the Prospectus; all of the outstanding shares of capital stock of the Company (including the Shares to be sold by the Selling Stockholders) have been duly and validly authorized and issued and are fully paid and non-assessable, and all of the outstanding Common Units of the Operating Partnership have been validly issued; none of the outstanding shares of capital stock of the Company or the Common Units of the Operating Partnership is subject to any pre-emptive or similar rights; except as described in or expressly contemplated by the Pricing Disclosure Package and the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in any of the Premier Entities, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock or other equity interest in any of the Premier Entities, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock and other equity interests of the Company and the Operating Partnership conform in all material respects to the descriptions thereof contained in the Registration Statements, the Pricing Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each of the Premier Entities have been duly and validly authorized and issued, are fully paid and non-assessable and, except as set forth in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.
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(l) Share Awards. With respect to the stock options, restricted stock units and performance share awards (the “Share Awards”) granted pursuant to the stock-based compensation plans of any of the Premier Entities (the “Company Stock Plans”), (i) each Share Award intended to qualify as an “incentive stock option” under Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”), so qualifies, (ii) each grant of a Share Award was duly authorized no later than the date on which the grant of such Share Award was by its terms to be effective by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and all other applicable laws and regulatory rules or requirements, including the rules of the Nasdaq Global Select Market (the “Nasdaq Market”) and (iv) each such grant was properly accounted for in accordance with generally accepted accounting principles in the United States in the financial statements (including the related notes) of the Company and its consolidated subsidiaries and disclosed in the Company’s filings with the Commission in accordance with the Exchange Act and all other applicable laws and regulatory rules or requirements. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company of granting, Share Awards prior to, or otherwise coordinating the grant of Share Awards with, the release or other public announcement of material information regarding the Company or any of its subsidiaries or their results of operations or prospects.
(m) Due Authorization. Each of the Company, the General Partner and the Operating Partnership has full right, power and authority to execute and deliver this Agreement and to perform its obligations hereunder; and all action required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and the consummation by it of the transactions contemplated hereby has been duly and validly taken.
(n) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by each of the Company, the General Partner and the Operating Partnership.
(o) The Shares. The Shares to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued and delivered and paid for as provided herein, will be duly and validly issued, will be fully paid and nonassessable and will conform in all material respects to the descriptions thereof in the Registration Statements, the Pricing Disclosure Package and the Prospectus and the issuance of the Shares is not subject to any preemptive or similar rights.
(p) Description of this Agreement. This Agreement conforms in all material respects to the description thereof contained in the Registration Statements, the Pricing Disclosure Package and the Prospectus.
(q) No Violation or Default. None of the Premier Entities is (i) in violation of its charter or by-laws or similar organizational documents, (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which any of the Premier Entities is a party or by which any of the Premier Entities is bound or to which any of the property or assets of any of the Premier Entities is subject, or (iii) except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, in violation of any law or statute
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or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the applicable Premier Entity, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(r) No Conflicts. The execution, delivery and performance by each of the Company, the General Partner and the Operating Partnership of this Agreement, the issuance and sale of the Option Shares by the Company and the consummation of the transactions contemplated by this Agreement will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any of the Premier Entities pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which any of the Premier Entities is a party or by which any of the Premier Entities is bound or to which any of the property or assets of any of the Premier Entities is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of any of the Premier Entities or (iii) except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the applicable Premier Entity, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect.
(s) No Consents Required. No consent, approval, authorization, order, license, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by each of the Company, the General Partner and the Operating Partnership of this Agreement, the issuance and sale of the Option Shares and the consummation of the transactions contemplated by this Agreement, except for (i) the registration of the Shares under the Securities Act, (ii) such consents, approvals, authorizations, orders and registrations or qualifications (collectively, a “Consent”) as have been or will be obtained or made or may be required by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and under applicable state securities laws in connection with the purchase and distribution of the Shares by the Underwriters, (iii) such Consents as have been or will be obtained or made prior to the Closing Date and (iv) where the failure to obtain such Consents would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(t) Legal Proceedings. Except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending (other than investigations, actions, suits or proceedings which are under seal and with respect to which none of the Premier Entities has any knowledge) to which any of the Premier Entities is or may be a party or to which any property of any of the Premier Entities is or may be the subject that, individually or in the aggregate, if determined adversely to such Premier Entity, would reasonably be expected to have a Material Adverse Effect; to the knowledge of the Company, the General Partner or the Operating Partnership, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others.
(u) Independent Accountants. Ernst & Young LLP, who have certified certain financial statements of the Company and its consolidated subsidiaries, is an independent registered public accounting firm with respect to the Premier Entities within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.
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(v) Title to Real and Personal Property. Except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, the Premier Entities have good and marketable title to, or have valid and marketable rights to lease or otherwise use, all items of real and personal property and assets that are material to the respective businesses of the Premier Entities, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Premier Entities or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(w) Title to Intellectual Property. The Premier Entities own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) (collectively, the “Intellectual Property Rights”) necessary for the conduct of their respective businesses as currently conducted and as proposed to be conducted as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, except where the failure to own or possess adequate rights to use all Intellectual Property Rights would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. The Premier Entities have not received any notice of any claim of infringement, misappropriation or conflict with any such Intellectual Property Rights of others in connection with any of the foregoing that would reasonably be expected to result in a Material Adverse Effect. The conduct of the respective businesses of the Premier Entities does not infringe upon the Intellectual Property Rights of any person, except for such infringement as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(x) Investment Company Act. The Company and the Operating Partnership are not, and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Registration Statements, the Pricing Disclosure Package and the Prospectus, will not be, required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).
(y) Taxes. The Premier Entities have paid all federal, state, local and foreign taxes required to be paid through the date hereof, except for taxes for which the relevant Premier Entities have established on their books and records adequate reserves in accordance with generally accepted accounting principles in the United States, or taxes currently payable without penalty or interest, and filed all tax returns required to be filed through the date hereof, except in each case where the failure to make such required payments or filings would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as otherwise disclosed in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, there is no tax deficiency that has been, or would reasonably be expected to be, asserted against any of the Premier Entities or any of their respective properties or assets, in each case, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
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(z) Licenses and Permits. The Premier Entities possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities, including healthcare regulatory agencies or bodies, that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in either of the Registration Statements, the Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the same would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, none of the Premier Entities has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course, except where such revocation, modification or non-renewal would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(aa) Healthcare Regulations. The statements included or incorporated by reference in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus from the sections of the Annual Report on Form 10-K under “Item 1A. Risk Factors—Risks Related to Healthcare Regulation” and “Item 1. Business—Government Regulation”, insofar as such statements describe the state, federal and foreign administrative healthcare laws, rules and regulations which are applicable to any of the Premier Entities (the “Healthcare Laws”), are true and correct in all material respects; to the knowledge of the Company, the General Partner or the Operating Partnership, there are no applicable state, federal and/or administrative healthcare laws, rules and regulations which as of this date are material to the businesses of the Premier Entities taken as a whole, which are not described in the Registration Statements, the Pricing Disclosure Package or the Prospectus. Except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, none of the Premier Entities is in violation of any Healthcare Laws, except for any violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, to the knowledge of the Company, the General Partner or the Operating Partnership, none of the Premier Entities has received notice from any governmental or regulatory authority of potential or actual material non-compliance by, or liability of, such Premier Entity under any Healthcare Laws.
(bb) Accurate Disclosure. The statements included or incorporated by reference in the Registration Statements, the Pricing Disclosure Package and the Prospectus under the captions “Prospectus supplement summary—Our structure”, “Description of Capital Stock”, “Certain Contractual Arrangements with Selling Stockholders” and “Contractual Arrangements with Certain Stockholders”, from the sections of the Annual Report on Form 10-K under “Item 1A. Risk Factors—Risks Related to Our Structure”, “Item 1A. Risk Factors—Risks Related to Our Class A Common Stock”, and “Item 13. Certain Relationships and Related Party Transactions, and Director Independence”, from the section of the Form 8-K filed on November 3, 2014 under “Item 3.02 Unregistered Sales of Equity Securities”, from the section of the Definitive Proxy Statement on Schedule 14A under “Related Person Transactions”, insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries in all material respects of such legal matters, agreements, documents or proceedings and present information required to be shown therein pursuant to the rules and regulations of the Commission. The statements included in the Registration Statements, the Pricing Disclosure Package and the Prospectus under the caption: “Certain U.S. federal income and estate tax considerations for non-U.S. holders”, insofar as they purport to describe provisions of U.S. federal income tax laws or legal conclusions with respect thereto, fairly and accurately summarize the matters referred to therein in all material respects.
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(cc) No Labor Disputes. No labor disturbance by or dispute with employees of any of the Premier Entities exists or, to the knowledge of the Company, the General Partner or the Operating Partnership, is contemplated or threatened, and the Company, the General Partner and the Operating Partnership are not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of the Premier Entities’ principal suppliers, contractors or customers, except, in any case, as would not have a Material Adverse Effect.
(dd) Compliance with and Liability under Environmental Laws. (i) The Premier Entities (a) are in compliance with any and all applicable federal, state, local and foreign laws and regulations relating to pollution or the protection of the environment, natural resources or human health or safety, including those relating to the generation, storage, treatment, use, handling, transportation, Release or threat of Release of Hazardous Materials (collectively, “Environmental Laws”), (b) have received, maintain and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses, (c) have not received notice of any actual or potential liability under or relating to, or actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any Release or threat of Release of Hazardous Materials, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, and (d) are not a party to any governmental order or decree that imposes any obligation or liability under any Environmental Law, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Premier Entities, except in the case of each of (i) and (ii) above, for any such matter, as would not reasonably be expected , individually or in the aggregate, to have a Material Adverse Effect; and (iii) except as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, (a) there are no proceedings that are pending, or that are known to be contemplated, against any Premier Entity under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (b) the Premier Entities are not aware of any facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws, including the Release or threat of Release of Hazardous Materials, that could reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Premier Entities, and (c) none of the Premier Entities anticipates material capital expenditures relating to any Environmental Laws.
(ee) Hazardous Materials. There has been no storage, generation, transportation, use, handling, treatment, Release or threat of Release of Hazardous Materials by, relating to or caused by any of the Premier Entities (or, to the knowledge of the Premier Entities, any other entity (including any predecessor) for whose acts or omissions any of the Premier Entities is or would reasonably be expected to be liable) at, on, under or from any property or facility now or previously owned, operated or leased by any of the Premier Entities, or at, on, under or from any other property or facility, in violation of any Environmental Laws or in a manner or amount or to a location that would reasonably be expected to result in any liability under any Environmental Law, except for any violation or liability which would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. “Hazardous Materials” means any material, chemical, substance, waste, pollutant, contaminant, compound, mixture, or constituent thereof, in any form or amount, including petroleum (including crude oil or any fraction thereof) and petroleum products, natural gas liquids, asbestos and asbestos containing materials, naturally
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occurring radioactive materials, brine, and drilling mud, regulated or which can give rise to liability under any Environmental Law. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or through the environment, or in, into, from or through any building or structure.
(ff) Compliance with ERISA. (i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or the Operating Partnership or any member of either of their respective “Controlled Groups” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Code) (collectively, the “ERISA Group”) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code, except for noncompliance that would not reasonably be expected to result in material liability to any member of the ERISA Group, (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption, that would reasonably be expected to result in a material liability to any member of the ERISA Group, (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, as applicable, has been satisfied (without taking into account any waiver thereof or extension of any amortization period) and is reasonably expected to be satisfied in the future (without taking into account any waiver thereof or extension of any amortization period), (iv) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under the Plan (determined based on those assumptions used to fund such Plan), (v) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur that either has resulted, or would reasonably be expected to result, in material liability to any member of the ERISA Group, (vi) no member of the ERISA Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001(a)(3) of ERISA), and (vii) there is no pending audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other governmental agency or any foreign regulatory agency with respect to any Plan that would reasonably be expected to result in material liability to any member of the ERISA Group. None of the following events has occurred or is reasonably likely to occur: (x) a material increase in the aggregate amount of contributions required to be made to all Plans by any member of the ERISA Group in the current fiscal year of the ERISA Group compared to the amount of such contributions made in the ERISA Group’s most recently completed fiscal year, or (y) a material increase in the “accumulated post-retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106) of any member of the ERISA Group compared to the amount of such obligations in the ERISA Group’s most recently completed fiscal year.
(gg) Disclosure Controls. The Company maintains an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to
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allow timely decisions regarding required disclosure. The Company has carried out an evaluation of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(hh) Accounting Controls. The Company maintains a system of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, without limitation, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (v) interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statements fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto. Since the end of the Company’s most recent audited fiscal year, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(ii) eXtensible Business Reporting Language. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statements fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(jj) Insurance. The Premier Entities have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks the Company reasonably believes are adequate to protect the Premier Entities and their respective businesses, except where the failure to have insurance would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and none of the Premier Entities has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business, except in each case as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(kk) No Unlawful Payments. None of the Premier Entities nor, to the knowledge of the Company, the General Partner or the Operating Partnership, any director, officer, agent employee, affiliate or other person acting on behalf of any of the Premier Entities has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made or conferred any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, (iii) violated or is in violation
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of any provision of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or any other applicable anti-bribery or anti-corruption law or (iv) made any rebate, payoff, influence payment, kickback or other unlawful payment in violation of the FCPA or the Bribery Act of 2010 of the United Kingdom, as amended. The Premier Entities have instituted, maintain and enforce, and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
(ll) Compliance with Anti-Money Laundering Laws. The operations of the Premier Entities are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Premier Entities conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any of the Premier Entities with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, the General Partner or the Operating Partnership threatened.
(mm) Compliance with Sanctions Laws. None of the Premier Entities or, to the knowledge of the Company, the General Partner or the Operating Partnership, any director, officer, agent, employee, affiliate or other person acting on behalf of any of the Premier Entities is currently the subject of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State) or other relevant sanctions authority (collectively, “Sanctions”), nor are any of the Premier Entities located, organized or resident in a country or territory that is the subject or target of Sanctions (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Option Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject of Sanctions, or (ii) to fund or facilitate any activities of or business in any Sanctioned Country.
(nn) No Restrictions on Subsidiaries. Except as disclosed in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, no Premier Entity is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such Premier Entity’s capital stock, from repaying to the Company any loans or advances to such Premier Entity from the Company or from transferring any of such Premier Entity’s properties or assets to the Company or any other Premier Entity.
(oo) No Broker’s Fees. None of the Premier Entities is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against the Premier Entities or any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.
(pp) No Registration Rights. Except as disclosed in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, no person has the right to require any of the Premier Entities to register any securities for sale under the Securities Act by reason of the filing of either of the Registration Statements with the Commission, the issuance and sale of the Option Shares by the Company or the sale of the Shares to be sold by the Selling Stockholders hereunder.
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(qq) No Stabilization. None of the Premier Entities has taken, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares, except that no representation is given as to the activities of the Underwriters in connection with the offering of Shares contemplated hereby.
(rr) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either of the Registration Statements, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(ss) Statistical and Market Data. Nothing has come to the attention of the Company, the General Partner or the Operating Partnership that has caused the Company, the General Partner or the Operating Partnership to believe that the statistical and market-related data included or incorporated by reference in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.
(tt) Sarbanes-Oxley Act. There is and has been no failure on the part of any of the Premier Entities or, to the knowledge of the Company, the General Partner or the Operating Partnership, any director or officer of any of the Premier Entities, in his or her capacity as such, to comply with any applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans.
(uu) Status under the Securities Act. At the time of filing each Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Shares and at the date hereof, the Company was not and is not an “ineligible issuer”, as defined in Rule 405 under the Securities Act. The Company has paid the registration fee for the Underwritten Shares pursuant to the Securities Act.
4. Representations and Warranties of the Selling Stockholders. Each of the Selling Stockholders, severally and not jointly, and solely with respect to itself and not any other Selling Stockholder, represents and warrants to each Underwriter that:
(a) Required Consents; Authority. All consents, approvals, authorizations and orders necessary for the execution and delivery by or on behalf of such Selling Stockholder of this Agreement, the Power of Attorney (the “Power of Attorney”) and the Custody Agreement (the “Custody Agreement”), and for the sale and delivery of the Underwritten Shares to be sold by such Selling Stockholder hereunder, have been obtained; and such Selling Stockholder has full right, power and authority to enter into this Agreement, the Power of Attorney and the Custody Agreement and to sell, assign, transfer and deliver the Underwritten Shares to be sold by such Selling Stockholder hereunder; this Agreement, the Power of Attorney and the Custody Agreement have each been duly authorized, executed and delivered by such Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by such Selling Stockholder of this Agreement, the Power of Attorney and the Custody Agreement, the sale of the Underwritten Shares by such Selling Stockholder and the consummation by such Selling Stockholder of the transactions contemplated herein or therein will not (i) conflict with or result
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in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of such Selling Stockholder pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which such Selling Stockholder is a party or by which such Selling Stockholder is bound or to which any of the property or assets of such Selling Stockholder is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of such Selling Stockholder or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over such Selling Stockholder, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not reasonably be expected to impair the performance of such Selling Stockholder’s obligations hereunder.
(c) Title to Underwritten Shares. Such Selling Stockholder has good and valid title to the Underwritten Shares to be sold at the Closing Date by such Selling Stockholder hereunder, free and clear of all liens, encumbrances, equities or adverse claims; such Selling Stockholder will have, immediately prior to the Closing Date, good and valid title to the Underwritten Shares to be sold at the Closing Date by such Selling Stockholder, free and clear of all liens, encumbrances, equities or adverse claims; and, upon delivery of the Underwritten Shares and payment therefor pursuant hereto, good and valid title to such Underwritten Shares, free and clear of all liens, encumbrances, equities or adverse claims, will pass to the several Underwriters.
(d) No Stabilization. Such Selling Stockholder has not taken, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares, except that no representation is given as to the activities of the Underwriters in connection with the offering of Underwritten Shares contemplated hereby.
(e) Pricing Disclosure Package. The Pricing Disclosure Package, as of the Applicable Time did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that such Selling Stockholder’s representations and warranties pursuant to this Section 4(e) are limited solely to the “Selling Stockholder Information” (as defined below). Each Underwriter, the Company, the General Partner, the Operating Partnership and each Selling Stockholder agrees that “Selling Stockholder Information” shall consist solely of the information with respect to such Selling Stockholder under the heading “Selling Stockholders”, included or incorporated by reference in each of the Pricing Disclosure Package (including any Pricing Disclosure Package that is subsequently amended), the Registration Statements and the Prospectus (or any amendment or supplement thereto).
(f) Issuer Free Writing Prospectus and Written Testing-the-Waters Communication. Other than the Registration Statements, the Preliminary Prospectus and the Prospectus, such Selling Stockholder (including its agents and representatives, other than the Underwriters in their capacity as such) has not prepared, used, authorized, approved or referred to and will not prepare, use, authorize, approve or refer to any Issuer Free Writing Prospectus, other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex B or Annex D hereto, each electronic road show and any other written communications approved in writing in advance by the Company and the Representatives.
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(g) Registration Statements and Prospectus. As of the applicable effective date of the Registration Statements and any post-effective amendment thereto, each Registration Statement and any such post-effective amendment did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that such Selling Stockholder’s representations and warranties pursuant to this Section 4(g) are limited solely to such Selling Stockholder’s Selling Stockholder Information.
(h) Material Information. As of the date hereof and as of the Closing Date, the sale of the Underwritten Shares by such Selling Stockholder is not and will not be prompted by any material information concerning the Company which is not set forth in the Secondary Registration Statement, the Pricing Disclosure Package or the Prospectus.
(i) Organization and Good Standing. Such Selling Stockholder has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, is duly qualified to do business and is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification, and has all power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged, except where the failure to be so qualified or in good standing or have such power or authority would not reasonably be expected to impair the performance of such Selling Stockholder’s obligations hereunder.
Each of the Selling Stockholders, severally and not jointly, represents and warrants that the Underwritten Shares to be sold by such Selling Stockholders hereunder have been placed in custody under a Custody Agreement relating to such Underwritten Shares, in the form heretofore furnished to you, duly executed and delivered by such Selling Stockholder or its Attorney-in-Fact (as defined below), as applicable, to Wells Fargo Bank, N.A., as custodian (the “Custodian”), and that such Selling Stockholder has duly executed and delivered Powers of Attorney, in the form heretofore furnished to you, appointing the person or persons indicated in Schedule 2 hereto, and each of them, as such Selling Stockholder’s Attorneys-in-fact (the “Attorneys-in-Fact” or any one of them the “Attorney-in Fact”) with authority to execute and deliver this Agreement and the Custody Agreement, among other matters, on behalf of such Selling Stockholder, to determine the purchase price to be paid by the Underwriters to the Selling Stockholders as provided herein, to authorize the delivery of the Underwritten Shares to be sold by such Selling Stockholder hereunder and otherwise to act on behalf of such Selling Stockholder in connection with the transactions contemplated by this Agreement and the Custody Agreement.
Each of the Selling Stockholders specifically agrees that the Underwritten Shares held in custody for such Selling Stockholder under the Custody Agreement, are subject to the interests of the Underwriters hereunder, and that the arrangements made by such Selling Stockholder for such custody, and the appointment by such Selling Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable, except as set forth therein. Each of the Selling Stockholders specifically agrees that the obligations of such Selling Stockholder hereunder shall
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not be terminated by operation of law, whether by the death or incapacity of any individual Selling Stockholder, or, in the case of an estate or trust, by the death or incapacity of any executor or trustee or the termination of such estate or trust, or in the case of a partnership, corporation or similar organization, by the dissolution of such partnership, corporation or organization, or by the occurrence of any other event. If any individual Selling Stockholder or any such executor or trustee should die or become incapacitated, or if any such estate or trust should be terminated, or if any such partnership, corporation or similar organization should be dissolved, or if any other such event should occur, before the delivery of the Underwritten Shares hereunder, such Underwritten Shares shall be delivered by or on behalf of such Selling Stockholder in accordance with the terms and conditions of this Agreement and the Custody Agreement, and actions taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if such death, incapacity, termination, dissolution or other event had not occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of such death, incapacity, termination, dissolution or other event.
5. Further Agreements of the Company, the General Partner and the Operating Partnership. The Company, the General Partner and the Operating Partnership covenant and agree, jointly and severally, with each Underwriter that:
(a) Required Filings. The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act , will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the Securities Act; will file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Shares; and will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters in New York City prior to 5:00 P.M., New York City time, on the business day next succeeding the date of this Agreement in such quantities as the Representatives may reasonably request. The Company will pay the registration fee for the offering of the Option Shares within the time period required by Rule 456(b)(1) under the Securities Act (without giving effect to the proviso therein) and in any event prior to the Closing Date.
(b) Delivery of Copies. Upon the request of the Representatives, the Company will deliver, without charge, (i) to the Representatives, four signed copies of each of the Registration Statements as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith and documents incorporated by reference therein, and (ii) to each Underwriter (A) a conformed copy of each of the Registration Statements as originally filed and each amendment thereto (without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto and documents incorporated by reference therein and each Issuer Free Writing Prospectus) as the Representatives may reasonably request. As used herein, the term “Prospectus Delivery Period” means such period of time after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is required by law to be delivered (or required to be delivered but for Rule 172 under the Securities Act) in connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements, Issuer Free Writing Prospectuses. During the Prospectus Delivery Period, before using, authorizing, approving, referring to or filing any Issuer
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Free Writing Prospectus, and before filing any amendment or supplement to either of the Registration Statements or the Prospectus, whether before or after the time that such Registration Statement becomes effective, the Company will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and, unless as otherwise required by applicable law upon advice of Underwriters’ and Company counsel, will not prepare, use, authorize, approve, refer to or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representatives reasonably object.
(d) Notice to the Representatives. The Company will advise the Representatives promptly, and confirm such advice in writing (which may be electronic mail), (i) when each of the Registration Statements has become effective (if the effective date of such Registration Statement is subsequent to the date of this Agreement), (ii) during the Prospectus Delivery Period, when any amendment to either of the Registration Statements has been filed or becomes effective (if such effective date is subsequent to the date of this Agreement), (iii) when any supplement to the Prospectus, any Issuer Free Writing Prospectus or any amendment to the Prospectus has been filed or distributed, (iv) during the Prospectus Delivery Period, of any request by the Commission for any amendment to either of the Registration Statements or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to either of the Registration Statements or any other request by the Commission for any additional information, (v) during the Prospectus Delivery Period, of the issuance by the Commission of any order suspending the effectiveness of either Registration Statement or preventing or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act, (vi) of the occurrence of any event or development within the Prospectus Delivery Period as a result of which the Prospectus, the Pricing Disclosure Package or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Pricing Disclosure Package or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading, (vii) during the Prospectus Delivery Period, of the receipt by the Company of any notice of objection of the Commission to the use of the Primary Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act and (viii) during the Prospectus Delivery Period, of the receipt by the Company of any notice with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order suspending the effectiveness of either of the Registration Statements, preventing or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or suspending any such qualification of the Shares and, if any such order is issued, will use its reasonable best efforts to obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event or development shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company will promptly notify the Underwriters thereof and will promptly prepare and, subject to paragraph (c) above, file with the Commission and furnish to the Underwriters and to such dealers as the
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Representatives may designate such amendments or supplements to the Prospectus (or any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in the Prospectus as so amended or supplemented (or any document to be filed with the Commission and incorporated by reference therein) will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law and (2) if at any time prior to the Closing Date (i) any event or development shall occur or condition shall exist as a result of which the Pricing Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Pricing Disclosure Package is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Pricing Disclosure Package to comply with law, the Company will promptly notify the Underwriters thereof and will promptly prepare and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to the Underwriters and to such dealers as the Representatives may designate such amendments or supplements to the Pricing Disclosure Package (or any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in the Pricing Disclosure Package as so amended or supplemented will not, in the light of the circumstances existing when the Pricing Disclosure Package is delivered to a purchaser, be misleading or so that the Pricing Disclosure Package will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Shares; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its security holders and the Representatives as soon as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of either of the Registration Statements.
(h) Clear Market. For a period of 60 days after the date of the Prospectus, none of the Premier Entities will (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, without the prior written consent of the Representatives, other than (A) the Shares to be sold hereunder and the Class A common units of the Operating Partnership to be acquired by the Company in connection with the purchase of the Option Shares, and the contribution of such Class A common units by the Company to the General Partner, (B) stock options, restricted stock, restricted stock units, performance share awards or other equity-based awards granted pursuant to (I) Company Stock
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Plans or other equity incentive plans disclosed in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus or (II) an equity-based inducement award in connection with the appointment or employment of any director or officer of any Premier Entity (an “Inducement Award”), provided that such awards granted pursuant to clauses (B)(I) and (B)(II) shall not vest during the 60-day period referred to above, (C) any shares of Class A Common Stock of the Company issued upon the exercise of options or the vesting of restricted stock or restricted stock units, in each case that will be outstanding on the Closing Date and, in each case, that are described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus, (D) the filing by the Company of any registration statement on Form S-8 with the Commission relating to the offering of shares of Class A Common Stock pursuant to (I) Company Stock Plans or other equity incentive plans disclosed in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus or (II) an Inducement Award, (E) the distribution of any materials by the Company pursuant to, required by or in connection with the Company’s obligations under the Exchange Agreement or the Registration Rights Agreement, dated as of September 25, 2013, among the Company and the limited partners of the Operating Partnership party thereto, and (F) the entry into an agreement providing for, or the filing by the Company of any registration statement on Form S-4 with the Commission in connection with, the issuance by the Company of shares of Class A Common Stock, or securities convertible into or exercisable or exchangeable for Class A Common Stock, in connection with any (1) mergers or other business combinations, (2) acquisition of securities, businesses, properties or other assets of another person or entity, (3) debt financings or (4) strategic investments (including joint ventures or partnerships) and, in each case, the issuance of such shares or securities pursuant to any such agreement; provided, that the aggregate number of shares of Class A Common Stock or securities convertible into or exercisable or exchangeable for Class A Common Stock (on an as-converted or as-exercised basis, as the case may be) that the Company may sell or issue or agree to sell or issue pursuant to this clause (F) shall not exceed 15% of the total number of shares of the Company’s Class A Common Stock and Class B Common Stock issued and outstanding immediately following the completion of the transactions contemplated by this Agreement; and provided further, that each recipient of such shares of Class A Common Stock or securities convertible into or exercisable or exchangeable for Class A Common Stock pursuant to this clause (F) or an Inducement Award shall execute a “lock-up” agreement substantially in the form of Exhibit A hereto and the Company shall enter stop transfer instructions consistent with the terms of such “lock-up” agreement with the Company’s transfer agent and registrar on such shares or securities, which the Company agrees it will not waive or amend without the prior written consent of the Representatives.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Option Shares as described in each of the Registration Statements, the Pricing Disclosure Package and the Prospectus under the heading “Use of Proceeds”.
(j) No Stabilization. None of the Premier Entities will take, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in any stabilization or manipulation of the price of the Stock, except that no covenant is made as to the activities by the Underwriters in connection with the offering of Shares contemplated hereby.
(k) Exchange Listing. The Company will use its reasonable best efforts to list for quotation the Shares on the Nasdaq Market.
(l) Reports. During the period of two years hereafter, the Company will furnish to the Representatives, promptly after they are available, copies of all reports or other
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communications (financial or other) furnished to holders of the Shares (other than reports or other communications furnished solely to any or all limited partners of the Operating Partnership, in their capacity as limited partners of the Operating Partnership) and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange or automatic quotation system; provided the Company will be deemed to have furnished such reports and financial statements to the Representatives to the extent they are filed on the Commission’s Electronic Data Gathering, Analysis, and Retrieval system.
(m) Record Retention. The Company will, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Securities Act.
(n) Emerging Growth Company. The Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of Shares within the meaning of the Securities Act and (ii) completion of the 60-day restricted period referred to in Section 5(h) hereof.
6. Further Agreements of the Selling Stockholders. Each of the Selling Stockholders covenants and agrees with each Underwriter that:
(a) Clear Market. For a period of 60 days after the date of the initial public offering of the Shares, without the prior written consent of the Representatives, such Selling Stockholder will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of Stock or any securities convertible into or exchangeable or exercisable for shares of Stock, whether now owned or hereafter acquired by such Selling Stockholder or with respect to which the Selling Stockholder has or hereafter acquires the power of disposition, or file, or cause to be filed, any registration statement under the Securities Act, with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Stock or any such other securities, whether any such swap or transaction is to be settled by delivery of Stock or other securities, in cash or otherwise.
(b) Amendments or Supplements. Such Selling Stockholder will promptly notify the Representatives of any untrue statement of a material fact included in any amendment or supplement to either of the Registration Statements or the Prospectus, or of any omission from such amendment or supplement of any material fact required to be stated therein or necessary to make the statements therein not misleading, solely with respect to the Selling Stockholder Information. Such Selling Stockholder will also promptly notify the Representatives of any facts coming to the attention of such Selling Stockholder that would cause such Selling Stockholder’s representations and warranties pursuant to Section 4(g) not to be true.
(c) No Stabilization. Such Selling Stockholder will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Stock.
(d) Tax Form. Such Selling Stockholder will deliver to the Representatives prior to or at the Closing Date a properly completed and executed United States Treasury Department Form W-9 (or other applicable form or statement specified by the Treasury Department regulations in lieu thereof) in order to facilitate the Underwriters’ documentation of their compliance with the reporting and withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the transactions herein contemplated.
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(e) Use of Proceeds. Such Selling Stockholder will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to a subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject of Sanctions or (ii) to fund or facilitate any activities of or business in any Sanctioned Country.
7. Certain Agreements of the Underwriters. Each Underwriter hereby represents and agrees that:
(a) It has not used, authorized use of, referred to or participated in the planning for use of, and will not use, authorize use of, refer to or participate in the planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which term includes use of any written information furnished to the Commission by the Company and not incorporated by reference in each of the Registration Statements and any press release issued by the Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus, (ii) any Issuer Free Writing Prospectus listed on Annex B or prepared pursuant to Section 3(c) or Section 4(f) above (including any electronic road show), or (iii) any free writing prospectus prepared by such underwriter and approved by the Company in advance in writing (each such free writing prospectus referred to in clauses (i) or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not, without the prior written consent of the Company, use any free writing prospectus that contains the final terms of the Shares unless such terms have previously been included in a free writing prospectus filed with the Commission; provided that Underwriters may use a term sheet substantially in the form of Annex C hereto without the consent of the Company; provided further that any Underwriter using such term sheet shall notify the Company, and provide a copy of such term sheet to the Company, prior to, or substantially concurrently with, the first use of such term sheet.
(c) It is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the offering (and will promptly notify the Company and the Selling Stockholders if any such proceeding against it is initiated during the Prospectus Delivery Period).
8. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing Date, as the case may be, as provided herein is subject to the performance by the Company, the General Partner, the Operating Partnership and each of the Selling Stockholders of their respective covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of either of the Registration Statements shall be in effect, and no proceeding for such purpose, pursuant to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.
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(b) Representations and Warranties. The respective representations and warranties of the Company, the General Partner, the Operating Partnership and the Selling Stockholders contained herein shall be true and correct on the date hereof and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements of the Company and its officers and of each of the Selling Stockholders and their officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the earlier of (A) the Applicable Time and (B) the execution and delivery of this Agreement, if there are any debt securities or preferred stock of, or guaranteed by, the Company that are rated by a “nationally recognized statistical rating organization”, as such term is defined in Section 3(a)(62) of the Exchange Act, (i) no downgrading shall have occurred in the rating accorded any such debt securities or preferred stock and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of any such debt securities or preferred stock (other than an announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. Subsequent to the earlier of (A) the Applicable Time and (B) the execution and delivery of this Agreement, no event or condition of a type described in Section 3(i) hereof shall have occurred or shall exist, which event or condition is not described in the Pricing Disclosure Package (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
(e) Officer’s Certificate. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate (x) of the chief financial officer or chief accounting officer of the Company and one additional senior executive officer of the Company who is reasonably satisfactory to the Representatives (i) confirming that such officers have carefully reviewed each of the Registration Statements, the Pricing Disclosure Package and the Prospectus and, to the knowledge of such officers, the representations set forth in Sections 3(b) and 3(f) hereof are true and correct, (ii) confirming that the other representations and warranties of the Company, the General Partner and the Operating Partnership in this Agreement are true and correct and that the Company, the General Partner and the Operating Partnership, as applicable, have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be, and (iii) to the effect set forth in paragraphs (a), (c) and (d) above and (y) of the Selling Stockholders, in form and substance reasonably satisfactory to the Representatives, (A) confirming that, to such Selling Stockholder’s knowledge, the representations of such Selling Stockholders set forth in Sections 4(e), 4(f) and 4(g) hereof are true and correct and (B) confirming that the other representations and warranties of such Selling Stockholders in this Agreement are true and correct and that such Selling Stockholders have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date.
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(f) Comfort Letters. On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, Ernst & Young LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference in either of the Registration Statements, the Pricing Disclosure Package and the Prospectus; provided, that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be, shall use a “cut-off” date no more than three business days prior to the Closing Date or such Additional Closing Date, as the case may be.
(g) Opinion and 10b-5 Statement of Counsel for the Company. McDermott Will & Emery LLP, counsel for the Company, shall have furnished to the Representatives, at the request of the Company, their written opinion and 10b-5 statement, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Annex A-1 hereto, with such changes as may be reasonably agreed to by the Representatives.
(h) Opinion of Counsel for the Selling Stockholders. The respective counsel for each of the Selling Stockholders set forth on Schedule 3 hereto shall have furnished to the Representatives, at the request of the Selling Stockholder for whom they are acting as counsel, their written opinion with respect to such Selling Stockholder, dated the Closing Date and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Annex A-2 hereto, with such changes as may be reasonably agreed to by the Representatives.
(i) Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, an opinion and 10b-5 statement of Cravath, Swaine & Moore LLP, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.
(j) No Legal Impediment to Issuance and/or Sale. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Option Shares by the Company or the sale of the Underwritten Shares by the Selling Stockholders; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares by the Company or the sale of the Shares by the Selling Stockholders.
(k) Good Standing. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the Company, the Operating Partnership and the significant subsidiaries in their respective jurisdictions of organization and their good standing as foreign entities in such other jurisdictions as the Representatives may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions.
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(l) Exchange Listing. The Shares to be delivered on the Closing Date or Additional Closing Date, as the case may be, shall have been approved for listing on the Nasdaq Market, subject to official notice of issuance.
(m) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between you and officers and directors of the Company relating to sales and certain other dispositions of shares of Stock or certain other securities, delivered to you on or before the date hereof, shall be full force and effect on the Closing Date or the Additional Closing Date, as the case may be.
(n) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company, the General Partner, the Operating Partnership and the Selling Stockholders, as applicable, shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.
9. Indemnification and Contribution.
(a) Indemnification of the Underwriters and the Selling Stockholders. Each of the Company, the General Partner and the Operating Partnership, jointly and severally, agrees to indemnify and hold harmless each Underwriter, its affiliates, selling agents, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of the Selling Stockholders, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other reasonable expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in either of the Registration Statements or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act, any road show as defined in Rule 433(h) under the Securities Act (a “road show”) or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended), or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (c) below; provided, however, that the Company, the General Partner and the Operating Partnership shall not be liable to any Selling Stockholder to that extent that such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Selling Stockholder furnished to the Company in writing by or on behalf of such Selling Stockholder expressly for use in the Registration Statements, the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus, any road show or any Pricing Disclosure Package, it being understood and agreed upon that the only such information so furnished by such Selling Stockholder consists of such Selling Stockholder’s Selling Stockholder Information.
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(b) Indemnification of the Underwriters, the Company, the General Partner and the Operating Partnership by the Selling Stockholders. Each of the Selling Stockholders severally and not jointly agrees to indemnify and hold harmless each Underwriter, its affiliates, selling agents, directors and officers and the Company, the General Partner and the Operating Partnership, and their respective directors and their respective officers who signed the Registration Statements, and each person, if any, who controls such Underwriter, the Company, the General Partner or the Operating Partnership within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any such losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information furnished by such Selling Stockholder in writing to the Company expressly for use in the Registration Statements, the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus, any road show or any Pricing Disclosure Package, it being understood and agreed upon that the only such information so furnished by such Selling Stockholder consists of such Selling Stockholder’s Selling Stockholder Information.
(c) Indemnification of the Company, the General Partner, the Operating Partnership and the Selling Stockholders. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the General Partner and the Operating Partnership, and their respective directors and their respective officers who signed the Registration Statements and each person, if any, who controls the Company, the General Partner or the Operating Partnership within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of the Selling Stockholders to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statements, the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus, any road show or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended), it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the information contained in the third paragraph, the last sentence of the fourth paragraph, the seventh paragraph, the twelfth paragraph, the thirteenth paragraph and the fourteenth paragraph under the caption “Underwriting”, and the names and number of shares agreed to be purchased by each Underwriter.
(d) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to paragraph (a), (b) or (c) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraph (a), (b) or (c) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraph (a), (b) or (c) above. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to such Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the
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Indemnifying Person) to represent the Indemnified Person in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person, (iii) the Indemnified Person shall have reasonably concluded, based upon the advice of counsel, that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person, or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be, in the judgment of the Indemnified Person’s counsel, inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by J.P. Morgan Securities LLC and any such separate firm for the Company, the General Partner or the Operating Partnership, their respective directors, their respective officers who signed the Registration Statements and any control persons of the Company, the General Partner or the Operating Partnership shall be designated in writing by the Company, the General Partner or the Operating Partnership, as applicable, and any such separate firm for the Selling Stockholders shall be designated in writing by the Attorney-in-Fact. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for reasonable fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into in good faith by the Indemnified Person (A) more than 60 days after receipt by the Indemnifying Person of such request and (B) more than 30 days after receipt by the Indemnifying Person of the proposed terms of such settlement and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(e) Contribution. If the indemnification provided for in paragraphs (a), (b) and (c) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, the General Partner, the Operating Partnership and the Selling Stockholders, on the one hand, and the Underwriters, on the other, from the offering of the Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault
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of the Company, the General Partner, the Operating Partnership and the Selling Stockholders, on the one hand, and the Underwriters, on the other, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, the General Partner, the Operating Partnership and the Selling Stockholders, on the one hand, and the Underwriters, on the other, shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company and the Selling Stockholders from the sale of the Shares and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus bear to the aggregate offering price of the Shares. The relative fault of the Company, the General Partner, the Operating Partnership and the Selling Stockholders, on the one hand, and the Underwriters, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the General Partner, the Operating Partnership and the Selling Stockholders or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(f) Limitation on Liability. The Company, the General Partner, the Operating Partnership, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contribution pursuant to paragraph (e) above were determined by pro rata allocation (even if the Selling Stockholders or the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (e) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (e) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of paragraphs (e) and (f), in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Shares exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to paragraphs (e) and (f) are several in proportion to their respective purchase obligations hereunder and not joint.
(g) Non-Exclusive Remedies. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity.
10. Effectiveness of Agreement. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
11. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Company and the Selling Stockholders, if after the execution and delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares, prior to the Additional Closing Date (i) trading generally shall have been suspended or materially limited on or by any of the New York Stock Exchange, the NYSE MKT or the Nasdaq Stock Market, (ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities, or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or
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outside the United States, that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
12. Defaulting Underwriter.
(a) If, on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Shares by other persons satisfactory to the Company and the Selling Stockholders on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then the Company and the Selling Stockholders shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such Shares on such terms. If other persons become obligated or agree to purchase the Shares of a defaulting Underwriter, either the non-defaulting Underwriters or the Company and the Selling Stockholders may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days in order to effect any changes that in the opinion of counsel for the Company, counsel for the Selling Stockholders or counsel for the Underwriters may be necessary in the Registration Statements and the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Registration Statements and the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 12, purchases Shares that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company and the Selling Stockholders shall have the right to require each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company and the Selling Stockholders shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to purchase Shares on the Additional Closing Date shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 12 shall be without liability on the part of the Company and the Selling Stockholders, except that the Company will continue to be liable for the payment of expenses set forth in Section 13 hereof and except that the provisions of Section 9 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company, the General Partner, the Operating Partnership, the Selling Stockholders or any non-defaulting Underwriter for damages caused by its default.
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13. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, (1) the Company will pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes payable in that connection, (ii) the costs incident to the preparation, printing and filing under the Securities Act of each of the Registration Statements, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Pricing Disclosure Package and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof, (iii) the costs of reproducing and distributing this Agreement, (iv) the fees and expenses of the Company’s counsel and independent accountants, (v) the fees and expenses incurred in connection with the registration or qualification of the Shares under the state or foreign securities or blue sky laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related reasonable and documented fees and expenses of one firm of counsel for the Underwriters) (which in no event shall exceed $7,500), (vi) the cost of preparing stock certificates, (vii) the costs and charges of any transfer agent and any registrar, (viii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering by, FINRA, (ix) all expenses incurred by the Company in connection with any “road show” presentation to potential investors and (x) all expenses and application fees related to the listing of the Shares on the Nasdaq Market; and (2) the Selling Stockholders will pay or cause to be paid the fees and expenses of the Selling Stockholders’ counsel. It is understood, however, that except as provided in this Section or Section 9, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the Shares by them and any advertising expenses connected with any offers they may make.
(b) If (i) this Agreement is terminated pursuant to Section 11(ii), (ii) the Company or the Selling Stockholders for any reason fail to tender the Shares for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Shares for any reason permitted under this Agreement (other than pursuant to clause (i), (iii) or (iv) of Section 11 or Section 12(c)), the Company, the General Partner and the Operating Partnership, jointly and severally, agree to reimburse the Underwriters for all documented out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby.
14. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to in Section 9 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such purchase.
15. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, the General Partner, the Operating Partnership, the Selling Stockholders and the Underwriters contained in this Agreement or made by or on behalf of the Company, the General Partner, the Operating Partnership, the Selling Stockholders or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Shares and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, the General Partner, the Operating Partnership, the Selling Stockholders or the Underwriters.
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16. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act, (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City, and (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act, and (d) for the avoidance of doubt, the “subsidiaries” of the Company shall include the General Partner, the Operating Partnership and each direct and indirect subsidiary of the Operating Partnership.
17. Miscellaneous.
(a) Authority of the Representatives. Any action by the Underwriters hereunder may be taken by any of the Representatives on behalf of the Underwriters, and any such action taken by the Representatives shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives c/o J. P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179; fax: (212) ###-###-####; Attention: Equity Syndicate Desk; Merrill Lynch, Pierce, Fenner & Smith Incorporated, One Bryant Park, New York, New York 10036; fax: (646) ###-###-####; Attention: Syndicate Department; and Wells Fargo Securities, LLC, 375 Park Avenue, New York, New York 10152; fax: (212) ###-###-####; Attention: Equity Syndicate Department. Notices to the Company shall be given to it at 13034 Ballantyne Corporate Place, Charlotte, North Carolina, 28277; fax: (704) ###-###-####; Attention: Chief Financial Officer and General Counsel. Notices to the Selling Stockholders shall be given to Mark Schonberger, Goodwin Procter LLP, 620 Eighth Avenue, New York, New York 10018, fax: (212) ###-###-####, with a copy to the Attorneys-in-Fact at Craig McKasson, Chief Financial Officer, Premier, Inc., 13034 Ballantyne Corporate Place, Charlotte, North Carolina, 28277, fax: (704) ###-###-####.
(c) Governing Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in such state.
(d) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
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[remainder of page intentionally left blank; signature page follows]
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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
| Very truly yours, | ||
| PREMIER, INC. | ||
| By: | /s/ Craig McKasson | |
| Name: Craig McKasson | ||
| Title: Chief Financial Officer | ||
| PREMIER SERVICES, LLC | ||
| By: | /s/ Craig McKasson | |
| Name: Craig McKasson | ||
| Title: Chief Financial Officer | ||
| PREMIER HEALTHCARE ALLIANCE, L.P. | ||
| By: | /s/ Craig McKasson | |
| Name: Craig McKasson | ||
| Title: Chief Financial Officer | ||
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| ALBERT EINSTEIN HEALTHCARE NETWORK |
| AURORA HEALTH CARE, INC. |
| BAYCARE HEALTH SYSTEM, INC. |
| CUMBERLAND MEDICAL CENTER, INC. |
| DOCTORS COMMUNITY HOSPITAL |
| FIRSTHEALTH OF THE CAROLINAS, INC. |
| GNYHA PURCHASING ALLIANCE, LLC |
| HALIFAX REGIONAL MEDICAL CENTER, INC. |
| HEALTHCOMP, INC. |
| HEARTLAND REGIONAL MEDICAL CENTER |
| D/B/A HEARTLAND HEALTH |
| HENDERSON COUNTY HOSPITAL |
| CORPORATION D/B/A MARGARET R. PARDEE |
| MEMORIAL HOSPITAL |
| HENRY FORD HEALTH SYSTEM |
| HERBERT J. THOMAS MEMORIAL HOSPITAL ASSOCIATION |
| JOHNSTON MEMORIAL HOSPITAL, INC. |
| LAUGHLIN MEMORIAL HOSPITAL, INC. |
| LENOIR HEALTH SERVICES, INC. |
| MARSHFIELD CLINIC, INC. |
| MERCY HEALTH SERVICES, INC. |
| MISSION HEALTH SYSTEM, INC. |
| MISSISSIPPI BAPTIST HEALTH SYSTEMS, INC. |
| MOUNTAIN STATES HEALTH ALLIANCE |
| PENINSULA REGIONAL MEDICAL CENTER |
| SEAGATE ALLIANCE LLC |
| SMYTH COUNTY COMMUNITY HOSPITAL |
| SOUTHCOAST HEALTH SYSTEM |
| ST. ANTHONY’S MEDICAL CENTER |
| TJUH SYSTEM |
| TANNER MEDICAL CENTER, INC. |
| THE CHARLOTTE-MECKLENBURG HOSPITAL |
| AUTHORITY D/B/A CAROLINAS HEALTHCARE SYSTEM |
| TUFTS MEDICAL CENTER, INC. |
| UHS OF DELAWARE, INC. |
| WATAUGA MEDICAL CENTER, INC. |
| WEIRTON MEDICAL CENTER, INC. |
| WINTER HAVEN HOSPITAL, INC. |
| YANKEE ALLIANCE, INC. |
| YANKEE ALLIANCE, LLC |
| YANKEE ALLIANCE SUPPLY CHAIN SOLUTIONS, LLC |
[Signature Page to Underwriting Agreement]
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| By: | /s/ Craig McKasson | |||
| Name: | Craig McKasson | |||
| Title: | Attorney-in-Fact acting on | |||
| behalf of each of the Selling | ||||
| Stockholders named in | ||||
| Schedule 2 to this Agreement | ||||
[Signature Page to Underwriting Agreement]
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| Accepted as of the date hereof: | ||
| J. P. MORGAN SECURITIES LLC MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED WELLS FARGO SECURITIES, LLC | ||
| Acting severally on behalf of themselves and the several Underwriters named in Schedule 1 hereto | ||
| By: | J. P. MORGAN SECURITIES LLC | |
| By: | /s/ Nikul Patel | |
| Name: Nikul Patel | ||
| Title: Vice President | ||
| By: | MERRILL LYNCH, PIERCE, FENNER & SMITH | |
| INCORPORATED | ||
| By: | /s/ Justin Walter | |
| Name: Justin Walter | ||
| Title: Managing Director | ||
| By: | WELLS FARGO SECURITIES, LLC | |
| By: | /s/ Elizabeth DiChiaro | |
| Name: Elizabeth DiChiaro | ||
| Title: Managing Director | ||
[Signature Page to Underwriting Agreement]
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Schedule 1
| Underwriter | Number of Underwritten Shares | |||
| J.P. Morgan Securities LLC | 1,038,630 | |||
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | 1,038,630 | |||
| Wells Fargo Securities, LLC | 1,038,630 | |||
| Citigroup Global Markets Inc. | 148,376 | |||
| Raymond James & Associates, Inc. | 148,376 | |||
| SunTrust Robinson Humphrey, Inc. | 148,376 | |||
| William Blair & Company, L.L.C. | 148,376 | |||
|
|
| |||
| Total | 3,709,394 | |||
Schedule 2
| Selling Stockholder | Number of Underwritten Shares: | |||
| Albert Einstein Healthcare Network | 74,749 | |||
| Aurora Health Care, Inc. | 219,304 | |||
| BayCare Health System, Inc. | 91,919 | |||
| Cumberland Medical Center, Inc. | 8,249 | |||
| Doctors Community Hospital | 20,769 | |||
| FirstHealth of the Carolinas, Inc. | 38,910 | |||
| GNYHA Purchasing Alliance, LLC | 1,264,600 | |||
| Halifax Regional Medical Center, Inc. | 9,173 | |||
| HealthComp, Inc. | 170,000 | |||
| Heartland Regional Medical Center d/b/a Heartland Health | 55,846 | |||
| Henderson County Hospital Corporation d/b/a Margaret R. Pardee Memorial Hospital | 16,116 | |||
| Henry Ford Health System | 167,317 | |||
| Herbert J. Thomas Memorial Hospital Association | 26,064 | |||
| Johnston Memorial Hospital, Inc. | 18,371 | |||
| Laughlin Memorial Hospital, Inc. | 7,596 | |||
| Lenoir Health Services, Inc. | 11,718 | |||
| Marshfield Clinic, Inc. | 3,936 | |||
| Mercy Health Services, Inc. | 33,438 | |||
| Mission Health System, Inc. | 88,246 | |||
| Mississippi Baptist Health Systems, Inc. | 36,999 | |||
| Mountain States Health Alliance | 76,890 | |||
| Peninsula Regional Medical Center | 48,207 | |||
| Seagate Alliance LLC | 85,567 | |||
| Smyth County Community Hospital | 8,015 | |||
| Southcoast Health System | 17,840 | |||
| St. Anthony’s Medical Center | 35,519 | |||
| TJUH System | 67,522 | |||
| Tanner Medical Center, Inc. | 26,184 | |||
| The Charlotte-Mecklenburg Hospital Authority d/b/a Carolinas HealthCare System | 254,063 | |||
| Tufts Medical Center, Inc. | 28,909 | |||
| UHS of Delaware, Inc. | 372,113 | |||
| Watauga Medical Center, Inc. | 13,936 | |||
| Weirton Medical Center, Inc. | 11,999 | |||
| Winter Haven Hospital, Inc. | 18,878 | |||
| Yankee Alliance, Inc. | 31,530 | |||
| Yankee Alliance, LLC | 159,616 | |||
| Yankee Alliance Supply Chain Solutions, LLC | 89,286 | |||
Exhibit A
FORM OF LOCK-UP AGREEMENT
[ ], 2014
J.P. MORGAN SECURITIES LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
WELLS FARGO SECURITIES, LLC
As Representatives of
the several Underwriters listed in
Schedule 1 to the Underwriting
Agreement referred to below
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Re: Premier, Inc. — Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several Underwriters, propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Premier, Inc., a Delaware corporation (the “Company”), Premier Services, LLC, a Delaware limited liability company (the “General Partner”), Premier Healthcare Alliance, L.P., a California limited partnership (the “Operating Partnership”), and the Selling Stockholders listed on Schedule 2 to the Underwriting Agreement, providing for the public offering (the “Public Offering”) by the several Underwriters named in Schedule 1 to the Underwriting Agreement (the “Underwriters”), of shares of Class A Common Stock, par value $0.01 per share, of the Company (the “Common Stock”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to purchase and make the Public Offering of the Common Stock, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, the undersigned will not, during the period ending 60 days after the date of the final prospectus supplement relating to the Public Offering (the “Prospectus”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock, Class B common units of the Operating Partnership or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant), or publicly disclose the intention to make any offer, sale, pledge or disposition, (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (3) make any demand for or exercise any right with respect
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to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock, in each case other than, (A) transfers of shares of Common Stock or such other securities as a bona fide gift or gifts, (B) transfers or dispositions of shares of Common Stock or such other securities to a charitable entity or to immediate family or to any trust formed for the direct or indirect benefit of the undersigned or the immediate family of the undersigned in a transaction not involving a disposition for value, (C) transfers or dispositions of shares of Common Stock or such other securities by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned, and (D) transfers or distributions of Common Stock made by the undersigned, if the undersigned is a corporation, partnership, limited liability company or other business entity, to (i) any entity that is controlled by, controls or is under common control with such entity, (ii) the general or limited partners, members, stockholders or wholly-owned subsidiaries of such entity, or (iii) if such entity is a trust, to the trustee or beneficiary of the trust; provided that in the case of any transfer, disposition or distribution pursuant to clauses (A), (B), (C) or (D), each transferee, donee or distributee shall execute and deliver to the Representatives a lock-up letter in the form of this Letter Agreement; and provided, further, that in the case of any transfer, disposition or distribution pursuant to clauses (A), (B), (C) or (D), no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement shall be required or shall be made voluntarily in connection with such transfer, disposition or distribution (other than a filing on a Form 5 made after the expiration of the 60-day period referred to above). For purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, marriage, domestic partnership or adoption, not more remote than first cousin.
Furthermore, notwithstanding the restrictions imposed by this Letter Agreement, the undersigned may, without the prior written consent of the Representatives on behalf of the Underwriters, (1) transfer the undersigned’s Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to the Company pursuant to any contractual arrangement in effect on the date of this Letter Agreement that provides for the repurchase of the undersigned’s Common Stock or such other securities by the Company or in connection with the termination of the undersigned’s employment with the Company, (2) transfer shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock that occurs by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, (3) establish a written trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Common Stock, provided that such plan does not provide for any transfers of Common Stock during the 60-day period contemplated by this Letter Agreement, (4) transfer or dispose of shares of Common Stock acquired by the undersigned in open market transactions following the completion of the Public Offering, and (5) transfer shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to the Company upon a vesting event of the Company’s securities or upon the exercise of options to purchase the Company’s securities, in each case on a “cashless” or “net exercise” basis or to cover tax withholding obligations of the undersigned in connection with such vesting or exercise; provided that in the case of clauses (2), (3) and (4), no filing by any party under the Exchange Act, or other public announcement shall be required or shall be made voluntarily in connection with such transfer or, in the case of clause (3), the establishment of such written trading plan (other than a filing on a Form 5 made after the expiration of the 60-day period referred to above).
Furthermore, notwithstanding the foregoing, the undersigned shall be permitted to make transfers, sales, tenders or other dispositions of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to a bona fide third party pursuant to a tender offer, merger, amalgamation, consolidation or other similar transaction involving a change of control of the Company or Operating Partnership (including, without limitation, entering into any lock-up, voting or similar agreement pursuant to which the undersigned may agree to transfer, sell, tender or otherwise dispose of
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Common Stock or other such securities in connection with any such transaction, or vote any Common Stock or other such securities in favor of any such transaction); provided that if such tender offer, merger, amalgamation, consolidation or other similar transaction is not completed, any Common Stock or any security convertible into or exercisable or exchangeable for Common Stock subject to this Letter Agreement shall remain subject to the restrictions contained in this Letter Agreement.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
The undersigned understands that, if (1) the Underwriting Agreement is not entered into on or before December 31, 2014, (2) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the shares of Common Stock to be sold thereunder or (3) the Company provides written notice to the Representatives that it has determined not to pursue the Public Offering, then the undersigned shall be released from all obligations under this Letter Agreement on the earliest date on which any event set forth in clause (1), (2) or (3) above occurs.
The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement.
This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
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| Very truly yours, | ||
| [NAME OF OFFICER/DIRECTOR] | ||
| By: |
| |
| Name: | ||
| Title: | ||
[Signature Page to Lock-Up Agreement]
