Exhibit 10.1

 

EXECUTED

 

 

 

 

 

 

 

PATRICK INDUSTRIES, INC.

 

(an Indiana corporation)

 

$150,000,000

 

1.00% Convertible Senior Notes due 2023

 

PURCHASE AGREEMENT

 

 

 

 

 

 

 

 

 

 

Dated: January 17, 2018

 

 

 

 

 

PATRICK INDUSTRIES, INC.

 

(an Indiana corporation)

 

$150,000,000

 

1.00% Convertible Senior Notes due 2023

 

PURCHASE AGREEMENT

 

January 17, 2018

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Wells Fargo Securities, LLC

 

as Representatives of the several Initial Purchasers

 

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, 3rd Floor

New York, New York 10152

 

Ladies and Gentlemen:

 

Patrick Industries, Inc., an Indiana corporation (the “Company”), confirms its
agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill
Lynch”), Wells Fargo Securities, LLC (“Wells Fargo”), and each of the other
Initial Purchasers named in Schedule A hereto (collectively, the “Initial
Purchasers,” which term shall also include any initial purchaser substituted as
hereinafter provided in Section 11 hereof), for whom Merrill Lynch and Wells
Fargo are acting as representatives (in such capacity, the “Representatives”),
with respect to (i) the sale by the Company and the purchase by the Initial
Purchasers, acting severally and not jointly, of the respective principal
amounts set forth in Schedule A hereto of $150,000,000 aggregate principal
amount of the Company’s 1.00% Convertible Senior Notes due 2023 (the “Initial
Securities”) and (ii) the grant by the Company to the Initial Purchasers, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of an additional $22,500,000 aggregate principal amount
of the Company’s 1.00% Convertible Senior Notes due 2023 (the “Option
Securities” and, together with the Initial Securities, the “Securities”). The
Securities are to be issued pursuant to an indenture dated as of January 22,
2018 (the “Indenture”) between the Company and U.S. Bank National Association,
as trustee (the “Trustee”). The Securities will be convertible into cash, shares
of common stock, no par value per share, of the Company (“Common Stock”) or a
combination of cash and shares of Common Stock, at the option of the Company, on
the terms, and subject to the conditions, set forth in the Indenture.

 

 

 

In connection with the offering of the Initial Securities, the Company is
separately entering into a convertible note hedge transaction and a warrant
transaction with each of Bank of America, N.A. and Wells Fargo Bank, National
Association (the “Call Spread Counterparties”), in each case pursuant to a
convertible note hedge confirmation (each, a “Base Bond Hedge Confirmation”) and
a warrant confirmation (each, a “Base Warrant Confirmation” and, the Base
Warrant Confirmations together with the Base Bond Hedge Confirmations, the “Base
Call Spread Confirmations”), respectively, each to be dated the date hereof, and
in connection with any exercise by the Initial Purchasers of their option to
purchase any Option Securities, the Company and each of the Call Spread
Counterparties may enter into an additional convertible note hedge transaction
and an additional warrant transaction pursuant to an additional convertible note
hedge confirmation (each, an “Additional Bond Hedge Confirmation”) and an
additional warrant confirmation (each, an “Additional Warrant Confirmation” and,
the Additional Warrant Confirmations together with the Additional Bond Hedge
Confirmations, the “Additional Call Spread Confirmations”), respectively, each
to be dated the date on which the Initial Purchasers exercise their option to
purchase such Option Securities. We refer to the Base Call Spread Confirmations
and the Additional Call Spread Confirmations collectively herein as the “Call
Spread Confirmations.”

 

The Company understands that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein and agrees
that the Initial Purchasers may resell, subject to the conditions set forth
herein, all or a portion of the Securities to purchasers (“Subsequent
Purchasers”) at any time after this Agreement has been executed and delivered.
The Securities are to be offered and sold through the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the “1933 Act”),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities
and the Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A
(“Rule 144A”) of the rules and regulations promulgated under the 1933 Act (the
“1933 Act Regulations”) by the Securities and Exchange Commission (the
“Commission”)).

 

The Company has prepared and delivered to each Initial Purchaser copies of a
preliminary offering memorandum dated January 16, 2018 prior to the Applicable
Time (as defined below) (the “Preliminary Offering Memorandum”) and has prepared
and will deliver to each Initial Purchaser, on the date hereof or the next
succeeding day, copies of a final offering memorandum dated January 17, 2018
(the “Final Offering Memorandum”), each for use by such Initial Purchaser in
connection with its solicitation of purchases of, or offering of, the
Securities. “Offering Memorandum” means, with respect to any date or time
referred to in this Agreement, the most recent offering memorandum (whether the
Preliminary Offering Memorandum or the Final Offering Memorandum, or any
amendment or supplement to either such document), including exhibits thereto and
any documents incorporated therein by reference, which has been prepared and
delivered by the Company to the Initial Purchasers, in the case of the
Preliminary Offering Memorandum prior to the Applicable Time, in connection with
their solicitation of purchases of, or offering of, the Securities. The Company
will prepare a final term sheet reflecting the final terms of the Securities, in
the form set forth in Schedule B hereto (the “Final Term Sheet”), and will
deliver such Final Term Sheet to the Initial Purchasers prior to the Applicable
Time in connection with their solicitation of purchases of, or offering of, the
Securities. The Company agrees that, unless it obtains the prior written consent
of the Representatives, it will not make any offer relating to the Securities by
any written materials other than the Offering Memorandum and the Issuer Written
Information. “Issuer Written Information” means (i) any writing intended for
general distribution to investors as evidenced by its being specified in
Schedule C hereto, including the Final Term Sheet, and (ii) any “road show” that
is a “written communication” within the meaning of the 1933 Act. “General
Disclosure Package” means the Preliminary Offering Memorandum and any Issuer
Written Information specified on Schedule C hereto and issued at or prior to
11:45 P.M., New York City time, on January 17, 2018 or such other time as agreed
by the Company and the Representatives (such date and time, the “Applicable
Time”).

 

All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), which is incorporated by
reference in the Offering Memorandum.

 

 2 

 

SECTION 1.  Representations and Warranties.

 

(a)  Representations and Warranties by the Company. The Company represents and
warrants to each Initial Purchaser as of the date hereof, the Applicable Time,
the Closing Time (as defined below) and any Date of Delivery (as defined below),
except for any representations and warranties that speak as of a specific date,
in which case only as of such date, and agrees with each Initial Purchaser, as
follows:

 

(i)  General Disclosure Package; Rule 144A Eligibility. The Company hereby
confirms that it has authorized the use of the General Disclosure Package,
including the Preliminary Offering Memorandum and the Final Term Sheet, and the
Final Offering Memorandum in connection with the offer and sale of the
Securities by the Initial Purchasers. The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Time, of the same class as
securities listed on a national securities exchange registered under Section 6
of the 1934 Act, or quoted in a U.S. automated interdealer quotation system.

 

(ii)  No Registration Required; No General Solicitation. Subject to the accuracy
of the representations and warranties of the Initial Purchasers set forth in
Section 6 hereof and the compliance by the Initial Purchasers with procedures
set forth in Section 6 hereof, it is not necessary in connection with the offer,
sale and delivery of the offered Securities to the Initial Purchasers and to
each Subsequent Purchaser in the manner contemplated by this Agreement, the
General Disclosure Package and the Final Offering Memorandum to register the
Securities under the 1933 Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended (the “1939 Act”). None of the Company, its
Affiliates or any person acting on its or any of their behalf (other than the
Initial Purchasers and their respective Affiliates (as herein defined) and
representatives, as to whom the Company makes no representation) has engaged, in
connection with the offering of the offered Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under the
1933 Act Regulations.

 

(iii)  Accurate Disclosure. As of the Applicable Time, neither (A) the General
Disclosure Package nor (B) any Issuer Written Information, when considered
together with the General Disclosure Package, included, includes or will include
an untrue statement of a material fact or omitted, omits or will 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. The Final Offering
Memorandum, at the Closing Time or at any Date of Delivery did not, does not and
will not contain an 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. The documents
incorporated or deemed to be incorporated by reference in the General Disclosure
Package and the Final Offering Memorandum, when such documents incorporated by
reference were filed with the Commission, when read together with the other
information in the General Disclosure Package or the Final Offering Memorandum,
as the case may be, did not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

 3 

 

The representations and warranties in this subsection shall not apply to
statements in or omissions from the General Disclosure Package or the Final
Offering Memorandum (or any amendment or supplement thereto) made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser through the Representatives expressly for use therein. For
purposes of this Agreement, the only information so furnished shall be the
information in the first paragraph under the heading “Plan of
Distribution—Commissions and Discounts,” the information in the first, second
and third paragraphs under the heading “Plan of Distribution—Price
Stabilization, Short Positions,” and the information in the third and fourth
paragraphs under the heading “Plan of Distribution—Convertible Note Hedge and
Warrant Transactions,” in each case contained in the Offering Memorandum
(collectively, the “Initial Purchaser Information”).

 

(iv)  Incorporation of Documents by Reference. The documents incorporated or
deemed to be incorporated by reference in the Offering Memorandum, at the time
they were or hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the “1934 Act Regulations”).

 

(v)  Independent Accountants. The accountants who certified the financial
statements and supporting schedules included or incorporated by reference in the
General Disclosure Package and the Offering Memorandum are independent public
accountants of the Company as required by the 1933 Act, the 1933 Act
Regulations, the 1934 Act, the 1934 Act Regulations and the Public Company
Accounting Oversight Board.

 

(vi)  Financial Statements; Non-GAAP Financial Measures. The financial
statements included or incorporated by reference in the General Disclosure
Package and the Final Offering Memorandum, together with the related schedules
and notes, present fairly, in all material respects, the financial position of
the Company and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders’ equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified; and except as stated in
the notes thereto, said financial statements have been prepared in conformity
with U.S. generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved, provided, however, that those
financial statements of the Company included or incorporated by reference in the
General Disclosure Package and the Final Offering Memorandum that are unaudited
are subject to year-end adjustments and do not contain all footnotes that may be
required under GAAP for annual financial statements. The supporting schedules,
if any, when reviewed with the financial statements of the Company present
fairly, in all material respects, in accordance with GAAP the information
required to be stated therein. The selected financial data and the summary
financial information included in the General Disclosure Package and the
Offering Memorandum present fairly, in all material respects, the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements included therein. Except as included therein, no
historical or pro forma financial statements or supporting schedules are
required to be included or incorporated by reference in the General Disclosure
Package or the Offering Memorandum under the 1933 Act or the 1933 Act
Regulations. All disclosures contained in the General Disclosure Package or the
Final Offering Memorandum, or incorporated by reference therein, regarding
“non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply in all material respects with Regulation G
of the 1934 Act and Item 10 of Regulation S-K of the 1933 Act, to the extent
applicable. The interactive data in eXtensible Business Reporting Language
incorporated by reference in the General Disclosure Package and the Final
Offering Memorandum 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.

 

 4 

 

(vii)  No Material Adverse Change in Business. Except as otherwise stated
therein, since the respective dates as of which information is given in the
General Disclosure Package or the Final Offering Memorandum, (A) there has been
no material adverse change in the condition, financial or otherwise, or in the
financial condition, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse Effect”), (B) there have been
no transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material with respect
to the Company and its subsidiaries considered as one enterprise, and (C)  there
has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.

 

(viii)  Good Standing of the Company. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Indiana and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the General Disclosure
Package and the Final Offering Memorandum and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing (or has equivalent
status) in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not reasonably be expected to result in a Material Adverse Effect.

 

(ix)  Good Standing of Subsidiaries. Each “significant subsidiary” of the
Company (as such term is defined in Rule 1-02 of Regulation S-X) (each, a
“Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized and
is validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, as applicable, has corporate or similar power and
authority to own, lease and operate its properties and to conduct its business
as described in the General Disclosure Package and the Final Offering Memorandum
and is duly qualified to transact business and is in good standing (or has
equivalent status) in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good standing would
not reasonably be expected to result in a Material Adverse Effect. Except as
otherwise disclosed in the General Disclosure Package and the Final Offering
Memorandum, all of the issued and outstanding capital stock of each Subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
None of the outstanding shares of capital stock of any Subsidiary were issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are the subsidiaries listed on
Schedule E hereto.

 

(x)  Capitalization. The authorized, issued and outstanding shares of capital
stock of the Company are as set forth in the General Disclosure Package and the
Final Offering Memorandum in the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the General Disclosure Package and the Final Offering Memorandum
or pursuant to the exercise of convertible securities or options referred to in
the General Disclosure Package and the Final Offering Memorandum). The
outstanding shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable. None of the outstanding
shares of capital stock of the Company were issued in violation of the
preemptive or other similar rights of any securityholder of the Company.

 

 5 

 

(xi)  Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.

 

(xii)  Authorization of the Indenture. The Indenture has been duly authorized by
the Company and, when duly executed and delivered by the Company and the
Trustee, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).

 

(xiii)  Authorization of the Securities and the Common Stock. The Securities
have been duly authorized and, at the Closing Time or the relevant Date of
Delivery, as the case may be, will have been duly executed by the Company and,
when authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will be in the form contemplated by, and entitled to the benefits of,
the Indenture. The maximum number of shares of Common Stock issuable upon
conversion of the Securities (including the maximum number of additional shares
of Common Stock by which the Conversion Rate (as such term is defined in the
Indenture) may be increased upon conversion in connection with a Make-Whole
Fundamental Change (as such term is defined in the Indenture) and assuming (x)
the Company elects, upon each conversion of the Securities, to deliver solely
shares of Common Stock, other than cash in lieu of any fractional shares, in
settlement of each such conversion and (y) the Initial Purchasers exercise their
option to purchase the Option Securities in full) (the “Maximum Number of
Underlying Securities”) have been duly authorized and reserved for issuance by
all necessary corporate action and such Maximum Number of Underlying Securities,
when issued upon such conversion, will be validly issued and will be fully paid
and non-assessable; and the issuance of such Maximum Number of Underlying
Securities upon such conversion will not be subject to the preemptive or other
similar rights of any securityholder of the Company. The maximum number of
shares of Common Stock issuable upon exercise and settlement or termination of
the warrants issued pursuant to the Base Warrant Confirmations and any
Additional Warrant Confirmations (the “Warrant Securities”) have been duly
authorized and reserved for issuance by all necessary corporate action and such
Warrant Securities, when issued upon exercise and settlement or termination of
such warrants in accordance with the terms of such warrants, will be validly
issued and will be fully paid and non-assessable; and the issuance of such
Warrant Securities upon such conversion will not be subject to the preemptive or
other similar rights of any securityholder of the Company.

 

(xiv)  Description of the Securities, the Common Stock and the Indenture. The
Securities and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the General Disclosure
Package and the Final Offering Memorandum. The Common Stock conforms in all
material respects to all statements relating thereto contained or incorporated
by reference in the General Disclosure Package and the Final Offering Memorandum
and such description conforms in all material respects to the rights set forth
in the instruments defining the same.

 

 6 

 

(xv)  Registration Rights. There are no persons with registration rights to have
any securities registered for sale or sold by the Company under the 1933 Act,
other than those rights that have been disclosed in the General Disclosure
Package and the Final Offering Memorandum or have been waived.

 

(xvi)  Absence of Violations, Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is (A) in violation of its charter, by-laws or similar
organizational document, (B) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound or to which any of the
properties or assets of the Company or any subsidiary is subject (collectively,
“Agreements and Instruments”), except for such defaults that would not, singly
or in the aggregate, result in a Material Adverse Effect, or (C) in violation of
any law, statute, rule, regulation, judgment, order, writ or decree of any
arbitrator, court, governmental body, regulatory body, administrative agency or
other authority, body or agency having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties, assets or operations
(each, a “Governmental Entity”), except for such violations that would not,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement, the
Indenture and the Securities and the consummation of the transactions
contemplated herein and in the General Disclosure Package and the Final Offering
Memorandum (including the issuance and sale of the Securities (including the
issuance of any Common Stock upon conversion thereof) and the use of the
proceeds from the sale of the Securities as described therein under the caption
“Use of Proceeds”), the issuance of any Warrant Securities and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches, defaults or
Repayment Events or liens, charges or encumbrances that would not, singly or in
the aggregate, reasonably be expected to result, in a Material Adverse Effect),
nor will such action result in any violation of the provisions of (i) the
charter, by-laws or similar organizational document of the Company or any of its
subsidiaries or (ii) any law, statute, rule, regulation, judgment, order, writ
or decree of any Governmental Entity (except, in the case of clause (ii) above,
for any such violation that would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect). As used herein, a “Repayment
Event” means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

(xvii)  Absence of Labor Dispute. No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary’s principal
suppliers, manufacturers, customers or contractors, which, in either case, would
reasonably be expected to have a Material Adverse Effect.

 

 7 

 

(xviii)  Absence of Proceedings. Except as disclosed in the General Disclosure
Package and the Final Offering Memorandum, there is no action, suit, proceeding,
inquiry or investigation before or brought by any Governmental Entity now
pending or, to the knowledge of the Company, threatened, against or affecting
the Company or any of its subsidiaries, which would reasonably be expected to
result in a Material Adverse Effect or which would reasonably be expected to
materially and adversely affect their respective properties or assets or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; and the aggregate of
all pending legal or governmental proceedings to which the Company or any such
subsidiary is a party or of which any of their respective properties or assets
is the subject which are not described in the General Disclosure Package and the
Final Offering Memorandum, including ordinary routine litigation incidental to
the business, would not reasonably be expected to result in a Material Adverse
Effect.

 

(xix)  Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
Governmental Entity is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder (including the issuance of any Common Stock upon
conversion thereof), the issuance of any Warrant Securities or the consummation
of the transactions contemplated by this Agreement (including the entry into and
performance by the Company under the Call Spread Confirmations) or for the due
execution, delivery and performance of the Indenture and the Securities, except
(A) such as have been already obtained, (B) as may be required under “Blue Sky”
or similar securities laws in connection with the purchase and initial sale of
the Securities by the Initial Purchasers in the manner contemplated by this
Agreement and in the Final Offering Memorandum or (C) the filing of a current
report on Form 8-K with the Commission under the 1934 Act regarding the
transactions contemplated hereby.

 

(xx)  Possession of Licenses and Permits. The Company and its subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate Governmental
Entities necessary to conduct the business now operated by them, except where
the failure so to possess would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. The Company and its
subsidiaries are in compliance with the terms and conditions of all Governmental
Licenses, except where the failure so to comply would not reasonably be expected
to, singly or in the aggregate, result in a Material Adverse Effect. All of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any Governmental Licenses
necessary in the operation of its businesses which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would reasonably
be expected to result in a Material Adverse Effect.

 

 8 

 

(xxi)  Title to Property. The Company and its subsidiaries have good and
marketable title to all real property owned by them and good title to all other
properties owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (A) are described in the General Disclosure Package and the
Final Offering Memorandum or (B) would not, singly or in the aggregate, be
reasonably expected to result in a Material Adverse Effect; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or any
of its subsidiaries holds properties described in the General Disclosure Package
or the Final Offering Memorandum, are in full force and effect, and neither the
Company nor any such subsidiary has received any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the Company
or any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease except, in each case, where it would not reasonably be expected to have
a Material Adverse Effect.

 

(xxii)  Possession of Intellectual Property. The Company and its subsidiaries
own or possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, “Intellectual Property”) necessary to carry
on the business now operated by them except where the failure to own or have the
legal right to use would not reasonably be expected to have a Material Adverse
Effect, and neither the Company nor any of its subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect.

 

(xxiii)  Environmental Laws. Except as described in the General Disclosure
Package and the Final Offering Memorandum or would not, singly or in the
aggregate, be reasonably expected to result in a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health from Hazardous Materials,
the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of hazardous chemicals, pollutants, contaminants, hazardous wastes, toxic
substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials or toxic mold (collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
“Environmental Laws”), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or
to the Company’s knowledge, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (D) to the Company’s
knowledge, there are no events or circumstances that would reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or Governmental Entity, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.

 

 9 

 

(xxiv)  Accounting Controls and Disclosure Controls. The Company and
subsidiaries maintain effective internal control over financial reporting
framework (as defined under Rule 13-a15 and 15d-15 under the 1934 Act
Regulations) and a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (C) access to assets is permitted
only in accordance with management’s general or specific authorization; (D) 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 (E) the interactive data in eXtensible Business Reporting
Language incorporated by reference in the General Disclosure Package and the
Final Offering Memorandum fairly presents the information called for in all
material respects and is prepared in accordance with the Commission's rules and
guidelines applicable thereto. Except as described in the General Disclosure
Package and the Final Offering Memorandum, since the end of the Company’s most
recent audited fiscal year, there has been (1) no material weakness in the
Company’s internal control over financial reporting (whether or not remediated)
and (2) 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. The Company and its
subsidiaries maintain an effective system of disclosure controls and procedures
(as defined in Rule 13a-15 and Rule 15d-15 under the 1934 Act Regulations) that
are designed to ensure that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms, and is accumulated and communicated to the
Company’s management, including its principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely
decisions regarding disclosure.

 

(xxv)  Compliance with the Sarbanes-Oxley Act. There is and has been no failure
on the part of the Company or, to the knowledge of the Company. any of the
Company’s directors or officers, in their capacities as such, to comply in all
material respects 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 and Sections 302 and 906 related to
certifications.

 

(xxvi)  Payment of Taxes. All United States federal income tax returns of the
Company and its subsidiaries required by law to be filed have been filed and all
taxes shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been provided. The United
States federal income tax returns of the Company through the fiscal year ended
December 31, 2016 have been settled and no assessment in connection therewith
has been made against the Company in all material respects. The Company and its
subsidiaries have filed, or obtained extensions of, all other tax returns that
are required to have been filed by them pursuant to applicable foreign, state,
local or other law except insofar as the failure to file such returns would not
reasonably be expected to result in a Material Adverse Effect, and has paid all
taxes due pursuant to such returns or pursuant to any assessment received by the
Company and its subsidiaries, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been established
by the Company or where the failure to pay would not reasonably be expected to
have a Material Adverse Effect. The charges, accruals and reserves on the books
of the Company in respect of any income and corporation tax liability for any
years not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for any years not finally determined,
except to the extent of any inadequacy that would not reasonably be expected to
result in a Material Adverse Effect.

 

 10 

 

(xxvii)  Insurance. The Company and its subsidiaries carry or are entitled to
the benefits of insurance, with financially sound and reputable insurers, in
such amounts and covering such risks as is generally maintained by companies of
established repute engaged in the same or similar business, and all such
insurance is in full force and effect. The Company has no reason to believe that
it or any of its subsidiaries will not be able (A) to renew its existing
insurance coverage as and when such policies expire or (B) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not reasonably be
expected to result in a Material Adverse Effect.

 

(xxviii)  Investment Company Act. The Company is not required, and upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the General Disclosure Package and
the Final Offering Memorandum (including the entry into and performance by the
Company under the Call Spread Confirmations) will not be required, to register
as an “investment company” under the Investment Company Act of 1940, as amended
(the “1940 Act”).

 

(xxix)  Absence of Manipulation. Neither the Company nor, to the Company’s
knowledge, any affiliate of the Company has taken, nor will the Company or any
affiliate take, directly or indirectly, any action which is designed, or would
reasonably be expected, to cause or result in, or which constitutes, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or to result in a violation of
Regulation M under the 1934 Act.

 

(xxx)  Foreign Corrupt Practices Act. (i) None of the Company, any of its
subsidiaries or, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or other person acting on behalf of the Company or any of
its subsidiaries is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of either (A) the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA or (B) the U.K. Bribery
Act 2010 (the “Bribery Act”); and (ii) the Company, its subsidiaries and, to the
knowledge of the Company, its affiliates have conducted their businesses in
compliance with the FCPA and the Bribery Act and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith. No part of the proceeds of
the offering of the Securities will be used, directly or, to the knowledge of
the Company, indirectly, in violation of the FCPA or the Bribery Act, each as
may be amended, or similar law of any other relevant jurisdiction, or the rules
or regulations thereunder.

 

(xxxi)  Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any
Governmental Entity involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.

 

 11 

 

(xxxii)  OFAC. None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee, affiliate or
representative of the Company or any of its subsidiaries is an individual or
entity (“Person”) currently the subject or target of any sanctions administered
or enforced by the United States Government, including, without limitation, the
U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the
United Nations Security Council (“UNSC”), the European Union, Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority (collectively,
“Sanctions”), nor is the Company located, organized or resident in a country or
territory that is the subject of Sanctions; and the Company will not directly or
indirectly use the proceeds of the sale of the Securities, or lend, contribute
or otherwise make available such proceeds to any subsidiaries, joint venture
partners or other Person, to fund any activities of or business with any Person,
or in any country or territory, that, at the time of such funding, is the
subject of Sanctions or in any other manner that will result in a violation by
any Person (including any Person participating in the transaction, whether as
underwriter, advisor, investor or otherwise) of Sanctions.

 

(xxxiii)  Statistical and Market-Related Data. Any statistical and
market-related data included in the General Disclosure Package or the Final
Offering Memorandum are based on or derived from sources that the Company
believes to be reliable and accurate and, to the extent required, the Company
has obtained the written consent to the use of such data from such sources.

 

SECTION 2.  Sale and Delivery to Initial Purchasers; Closing.

 

(a)  Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, severally and not jointly, and
each Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule A, the aggregate principal amount of
Initial Securities set forth in Schedule A opposite the name of such Initial
Purchaser, plus any additional principal amount of Initial Securities which such
Initial Purchaser may become obligated to purchase pursuant to the provisions of
Section 11 hereof, subject, in each case, to such adjustments among the Initial
Purchasers as the Representatives in their sole discretion shall make to ensure
that any sales or purchases are in authorized denominations.

 

(b)  Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Initial Purchasers, severally
and not jointly, to purchase the Option Securities, at the price set forth in
Schedule A. The option hereby granted may be exercised for 30 days after the
date hereof and may be exercised in whole or in part on one occasion only for
the purpose of covering overallotments made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Company setting forth the amount of Option Securities as to which the several
Initial Purchasers are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a “Date of Delivery”) shall be determined by the Representatives, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time. If the option is exercised
as to all or any portion of the Option Securities, each of the Initial
Purchasers, acting severally and not jointly, will purchase that proportion of
the total principal amount of Option Securities then being purchased which the
number of Initial Securities set forth in Schedule A opposite the name of such
Initial Purchaser bears to the total principal amount of Initial Securities,
subject, in each case, to such adjustments as the Representatives in their sole
discretion shall make to ensure that any sales or purchases are in authorized
denominations.

 

 12 

 

(c)  Payment. Payment of the purchase price for, and delivery of certificates or
security entitlements for, the Initial Securities shall be made at the offices
of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017, or
at such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. (New York City time) on the second (third, if the pricing
occurs after 4:30 P.M. (New York City time) on any given day) business day after
the date hereof (unless postponed in accordance with the provisions of
Section 11), or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives and the Company (such time and
date of payment and delivery being herein called the “Closing Time”).

 

In addition, in the event that any or all of the Option Securities are purchased
by the Initial Purchasers, payment of the purchase price for, and delivery of
certificates or security entitlements for, such Option Securities shall be made
at the above-mentioned offices, or at such other place as shall be agreed upon
by the Representatives and the Company, on each Date of Delivery as specified in
the notice from the Representatives to the Company.

 

Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company against delivery to the
Representatives for the respective accounts of the Initial Purchasers of
certificates or security entitlements for the Securities to be purchased by
them. It is understood that each Initial Purchaser has authorized the
Representatives, for their account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. The Representatives,
individually and not as representatives of the Initial Purchasers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by any Initial
Purchaser whose funds have not been received by the Closing Time or the relevant
Date of Delivery, as the case may be, but such payment shall not relieve such
Initial Purchaser from its obligations hereunder.

 

SECTION 3.  Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:

 

(a)  Delivery of Offering Memorandum. The Company has delivered to each Initial
Purchaser, without charge, as many copies of the Preliminary Offering Memorandum
(as amended or supplemented) and documents incorporated by reference therein as
such Initial Purchaser reasonably requested, and the Company hereby consents to
the use of such copies. The Company will furnish to each Initial Purchaser,
without charge, such number of copies of the Final Offering Memorandum and
documents incorporated by reference therein as such Initial Purchaser may
reasonably request.

 

(b)  Notice and Effect of Material Events. If at any time prior to the
completion of the resales of the Securities by the Initial Purchasers, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Initial Purchasers or for the Company, to amend
or supplement the General Disclosure Package or the Final Offering Memorandum in
order that the General Disclosure Package or the Final Offering Memorandum, as
the case may be, will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a Subsequent Purchaser, the Company will promptly (A) give the
Representatives notice of such event and (B) prepare any amendment or supplement
as may be necessary to correct such statement or omission and, a reasonable
amount of time prior to any proposed use or distribution, furnish the
Representatives with copies of any such amendment or supplement; provided that
the Company shall not use or distribute any such amendment or supplement to
which the Representatives or counsel for the Initial Purchasers shall object.
The Company will furnish to the Initial Purchasers such number of copies of such
amendment or supplement as the Initial Purchasers may reasonably request.

 

 13 

 

(c)  Reporting Requirements. Until the completion of initial resales of the
Securities by the Initial Purchasers, the Company will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations. The Company
has given the Representatives notice of any filings made pursuant to the 1934
Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the
Company will give the Representatives notice of its intention to make any such
filing from the Applicable Time to the Closing Time and will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the Initial Purchasers
shall reasonably object.

 

(d)  Blue Sky Qualifications. The Company will use its reasonable best efforts,
in cooperation with the Initial Purchasers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
maintain such qualifications in effect so long as required to complete the
distribution of the Securities but no longer than one year after the date
hereof; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject.

 

(e)  Use of Proceeds. The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the General Disclosure
Package and the Final Offering Memorandum under “Use of Proceeds.”

 

(f)  DTCC. The Company will cooperate with the Initial Purchasers and use its
reasonable best efforts to permit the offered Securities to be eligible for
clearance and settlement through the facilities of The Depository Trust &
Clearing Corporation (“DTCC”).

 

(g)  Reservation; Listing. The Company will reserve and keep available at all
times, free of pre-emptive rights, a number of shares of Common Stock equal to
the sum of the Maximum Number of Underlying Securities and the Warrant
Securities. The Company will use its reasonable best efforts to effect and
maintain the listing of the Maximum Number of Underlying Securities and the
Warrant Securities on the Nasdaq Global Select Market.

 

(h)  Restriction on Sale of Securities. During a period of 60 days from the date
of the Final Offering Memorandum, the Company will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, 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 any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file or
confidentially submit any registration statement under the 1933 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 Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or the
shares of Common Stock issuable upon conversion of the Securities, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the General Disclosure Package and the Final Offering Memorandum,
(C) any shares of Common Stock issued or options to purchase Common Stock
granted or equity incentive awards granted pursuant to existing employee benefit
plans of the Company referred to in the General Disclosure Package and the Final
Offering Memorandum, (D) any shares of Common Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan referred to in
the General Disclosure Package and the Final Offering Memorandum, (E) the
authorization of an increase in the amount of Common Stock available under
existing employee benefit plans of the Company referred to in the General
Disclosure Package and the Final Offering Memorandum and the related filing of a
Registration Statement on Form S-8 to register such shares of Common Stock, (F)
the entry into the Warrant Confirmations, (G) any Common Stock issued upon
exercise and settlement or termination of the warrant transactions evidenced by
the Base Warrant Confirmations and any Additional Warrant Confirmations and (H)
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock issued in connection with acquisitions, joint
ventures and similar types of arrangements of up to 5% of outstanding Common
Stock in aggregate at the time of this Agreement, as long as the recipients of
such securities also agree not to sell or transfer those securities without the
prior written consent of Merrill Lynch for a period of 90 days from the date of
the Final Offering Memorandum.

 

 14 

 

SECTION 4.  Payment of Expenses.

 

(a)  Expenses. The Company will pay or cause to be paid all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, issuance and delivery of the Securities to the Initial Purchasers
and the Common Stock issuable upon conversion thereof and any charges of DTCC in
connection therewith, (ii) the preparation, printing and delivery to the Initial
Purchasers of copies of each Preliminary Offering Memorandum, any Issuer Written
Information, the Final Term Sheet and the Final Offering Memorandum and any
amendments or supplements thereto and any costs associated with electronic
delivery of any of the foregoing by the Initial Purchasers to investors,
(iii) the preparation, issuance and delivery of the certificates or security
entitlements for the Securities to the Initial Purchasers, including any stock
or other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Initial Purchasers, (iv) the fees
and disbursements of the Company’s counsel, accountants and other advisors, (v) 
the fees and expenses of the Trustee and of any transfer agent or registrar for
the Securities or the Common Stock issuable upon conversion of the Securities,
(vi) the costs and expenses of the Company relating to investor presentations on
any “road show” undertaken in connection with the marketing of the Securities
and (vii) the fees and expenses incurred in connection with the listing of the
Maximum Number of Underlying Securities and the Warrant Securities on the Nasdaq
Global Select Market.

 

(b)  Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 10(a)(i)
or (iii), or Section 11 hereof, the Company shall reimburse the Initial
Purchasers for all of their reasonable and documented out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Initial
Purchasers.

 

SECTION 5.  Conditions of Initial Purchasers’ Obligations. The obligations of
the several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company contained herein or in
certificates of any officer of the Company or any of its subsidiaries delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:

 

(a)  Opinions of Counsel for Company. At the Closing Time, the Representatives
shall have received (i) the favorable opinion, dated the Closing Time, of
McDermott Will & Emery LLP, counsel for the Company in form and substance
satisfactory to counsel for the Initial Purchasers, together with signed or
reproduced copies of such letter for each of the other Initial Purchasers; (ii)
a negative assurance letter, dated the Closing Time, of McDermott Will & Emery
LLP, counsel for the Company in form and substance satisfactory to counsel for
the Initial Purchasers, together with signed or reproduced copies of such letter
for each of the other Initial Purchasers and (iii) the favorable opinion, dated
the Closing Time, of Warrick and Boyn, L.L.P., Indiana counsel for the Company,
in form and substance satisfactory to counsel for the Initial Purchasers,
together with signed or reproduced copies of such letter for each of the other
Initial Purchasers, and, in each case, to such further effect as counsel to the
Initial Purchasers may reasonably request. Such counsel may state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers and other representatives of the
Company and its subsidiaries and certificates of public officials.

 

 15 

 

(b)  Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Representatives shall have received the favorable opinion, dated the Closing
Time, of Davis Polk & Wardwell LLP, counsel for the Initial Purchasers, together
with signed or reproduced copies of such letter for each of the other Initial
Purchasers, with respect to certain matters in form and substance satisfactory
to the Representatives. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York, the General Corporation Law of the State of Delaware and the federal
securities laws of the United States, upon the opinions of counsel satisfactory
to the Representatives. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers and other representatives of the Company
and its subsidiaries and certificates of public officials.

 

(c)  Officers’ Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the General Disclosure Package or the Final Offering Memorandum, any
Material Adverse Effect, and the Representatives shall have received a
certificate of the Chief Executive Officer or the President of the Company and
of the chief financial or chief accounting officer of the Company, dated the
Closing Time in their capacity as officers of the Company, to the effect that
(i) there has been no such Material Adverse Effect, (ii) the representations and
warranties of the Company in this Agreement are true and correct with the same
force and effect as though expressly made at and as of the Closing Time, and
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Closing Time.

 

(d)  Accountant’s Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Crowe Horwath LLP a
letter, dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Initial Purchasers, containing statements and information of
the type ordinarily included in accountants’ “comfort letters” to Initial
Purchasers with respect to the financial statements and certain financial
information contained in the General Disclosure Package and the Offering
Memorandum.

 

(e)  Bring-down Comfort Letter. At the Closing Time, the Representatives shall
have received from Crowe Horwath LLP a letter, dated as of the Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (d) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.

 

(f)  Approval of Listing. At the Closing Time, the Maximum Number of Underlying
Securities and the Warrant Securities shall have been approved for listing on
the Nasdaq Global Select Market, subject only to official notice of issuance.

 

(g)  Lock-up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form of Exhibit A hereto
signed by the persons listed on Schedule D hereto.

 

(h)  Maintenance of Rating. Neither the Company nor its subsidiaries have any
debt securities or preferred stock that are rated by any “nationally recognized
statistical rating organization” (as defined in Section 3(a)(62) of the 1934
Act.

 

 16 

 

(i)  Conditions to Purchase of Option Securities. In the event that the Initial
Purchasers exercise their option provided in Section 2(b) hereof to purchase all
or any portion of the Option Securities, the representations and warranties of
the Company contained herein and the statements in any certificates furnished by
the Company, any of its subsidiaries hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:

 

(i) Officers’ Certificate. A certificate, dated such Date of Delivery, of the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(c) hereof remains true and correct as of
such Date of Delivery.

 

(ii) Opinion of Counsel for the Company. If requested by the Representatives,
(i) the favorable opinion of McDermott Will & Emery LLP, counsel for the
Company; (ii) a negative assurance letter of McDermott Will & Emery LLP, counsel
for the Company and (iii) the favorable opinion of Warrick and Boyn, L.L.P.,
Indiana counsel for the Company, each in form and substance satisfactory to
counsel for the Initial Purchasers and dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinions required by Section 5(a) hereof.

 

(iii) Opinion of Counsel for Initial Purchasers. If requested by the
Representatives, the favorable opinion of Davis Polk & Wardwell LLP, counsel for
the Initial Purchasers, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b) hereof.

 

(vi) Bring-down Comfort Letter. If requested by the Representatives, a letter
from Crowe Horwath LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the same form
and substance as the letter furnished to the Representatives pursuant to Section
5(d) hereof, except that the “specified date” in the letter furnished pursuant
to this paragraph shall be a date not more than three business days prior to
such Date of Delivery.

 

(j)  Additional Documents. At the Closing Time and at each Date of Delivery (if
any) counsel for the Initial Purchasers shall have been furnished with such
customary documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Representatives and counsel for the Initial
Purchasers.

 

(k)  Termination of Agreement. If any condition specified in this Section shall
not have been fulfilled when and as required to be fulfilled, this Agreement,
or, in the case of any condition to the purchase of Option Securities on a Date
of Delivery which is after the Closing Time, the obligations of the several
Initial Purchasers to purchase the relevant Option Securities, may be terminated
by the Representatives by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 7, 8, 9, 15, 16 and 17 shall survive any
such termination and remain in full force and effect.

 

 17 

 

SECTION 6.  Subsequent Offers and Resales of the Securities.

 

(a)  Offer and Sale Procedures. Each of the Initial Purchasers and the Company
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:

 

(i)  Offers and Sales. Offers and sales of the Securities shall be made to such
persons and in such manner as is contemplated by the Offering Memorandum. Each
Initial Purchaser severally agrees that it will not offer, sell or deliver any
of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. The Company has
not entered into any contractual arrangement, other than this Agreement and the
other agreements and instruments contemplated hereby and by the General
Disclosure Package and the Final Offering Memorandum, with respect to the
distribution of the Securities or the Common Stock issuable upon conversion of
the Securities and the Company will not enter into any such arrangement except
as contemplated hereby and thereby.

 

(ii)  No General Solicitation. No general solicitation or general advertising
(within the meaning of Rule 502(c) under the 1933 Act Regulations) will be used
in the United States in connection with the offering or sale of the Securities.

 

(iii)  Legends. Each of the Securities will bear, to the extent applicable, the
legend contained in “Transfer restrictions” in the General Disclosure Package
and the Final Offering Memorandum for the time period and upon the other terms
stated therein.

 

(iv) Minimum Principal Amount. No sale of the Securities to any one Subsequent
Purchaser will be for less than U.S. $1,000 principal amount and no Security
will be issued in a smaller principal amount.

 

(b)  Covenants of the Company. The Company covenants with each Initial Purchaser
as follows:

 

(i) Integration. The Company agrees that it will not and will cause its
Affiliates not to, directly or indirectly, solicit any offer to buy, sell or
make any offer or sale of, or otherwise negotiate in respect of, securities of
the Company of any class if, as a result of the doctrine of “integration”
referred to in Rule 502 under the 1933 Act Regulations, such offer or sale would
render invalid (for the purpose of (i) the sale of the offered Securities by the
Company to the Initial Purchasers, (ii) the resale of the offered Securities by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the
offered Securities by such Subsequent Purchasers to others) the exemption from
the registration requirements of the 1933 Act provided by Section 4(a)(2)
thereof or by Rule 144A thereunder or otherwise.

 

(ii) Rule 144A Information. The Company agrees that, in order to render the
offered Securities eligible for resale pursuant to Rule 144A, while any of the
offered Securities remain outstanding, it will make available, upon request, to
any holder of offered Securities or prospective purchasers of Securities the
information specified in Rule 144A(d)(4), unless the Company furnishes
information to the Commission pursuant to Section 13 or 15(d) of the 1934 Act.

 

(iii) Restriction on Repurchases. Until the expiration of thirteen months after
the original issuance of the offered Securities, the Company will not, and will
cause its Affiliates not to, resell any offered Securities which are “restricted
securities” (as such term is defined under Rule 144(a)(3)), whether as
beneficial owner or otherwise (except as agent acting as a securities broker on
behalf of and for the account of customers in the ordinary course of business in
unsolicited broker’s transactions).

 

 18 

 

(c)  Representations, Warranties and Agreements of the Initial Purchasers. Each
Initial Purchaser severally and not jointly represents and warrants to, and
agrees with, the Company that it is a Qualified Institutional Buyer and an
“accredited investor” within the meaning of Rule 501(a) under the 1933 Act
Regulations. Each Initial Purchaser understands that the offered Securities have
not been and will not be registered under the 1933 Act and may not be offered or
sold within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the 1933 Act. Each
Initial Purchaser severally represents and agrees that it has not offered or
sold, and will not offer or sell, any offered Securities constituting part of
its allotment within the United States except in accordance with Rule 144A or
another applicable exemption from the registration requirements of the 1933 Act.
Accordingly, neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any form
of general solicitation or general advertising (within the meaning of Regulation
D) in the United States. Each Initial Purchaser will take reasonable steps to
inform, and cause each of its affiliates (as such term is defined in Rule 501(b)
under the 1933 Act Regulations (each, an “Affiliate”)) to take reasonable steps
to inform, persons acquiring Securities from such Initial Purchaser or
Affiliate, as the case may be, in the United States that the Securities (A) have
not been and will not be registered under the 1933 Act, (B) are being sold to
them without registration under the 1933 Act in reliance on Rule 144A or in
accordance with another exemption from registration under the 1933 Act, as the
case may be, and (C) may not be offered, sold or otherwise transferred except
(1) to the Company, (2) in accordance with Rule 144A to a person whom the seller
reasonably believes is a Qualified Institutional Buyer that is purchasing such
Securities for its own account or for the account of a Qualified Institutional
Buyer to whom notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A or (3) pursuant to another available exemption from
registration under the 1933 Act.

 

SECTION 7.  Indemnification.

 

(a)  Indemnification of Initial Purchasers. The Company agrees to indemnify and
hold harmless each Initial Purchaser, its Affiliates, its selling agents and
each person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

 

(i) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of any untrue statement or alleged untrue statement of
a material fact included (A) in any Preliminary Offering Memorandum, the Final
Offering Memorandum, the information contained in the Final Term Sheet, any
Issuer Written Information (or any amendment or supplement to the foregoing) or
(B) in any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the offering of the
Securities (“Marketing Materials”), including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically), or the omission or alleged omission in any Preliminary Offering
Memorandum, the Final Offering Memorandum, the Final Term Sheet, any Issuer
Written Information (or any amendment or supplement to the foregoing), the
information contained in the Final Term Sheet or in any Marketing Materials of a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;

 

(ii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 7(d) below) any such settlement is effected
with the written consent of the Company;

 

(iii) against any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel chosen by the Representatives),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;

 

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in the
General Disclosure Package, any Preliminary Offering Memorandum or the Final
Offering Memorandum (or any amendment or supplement to the foregoing) in
reliance upon and in conformity with the Initial Purchaser Information.

 

 19 

  

(b) Indemnification of Company, Directors and Officers. Each Initial Purchaser
severally agrees to indemnify and hold harmless the Company, its directors, its
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
General Disclosure Package, any Preliminary Offering Memorandum or the Final
Offering Memorandum (or any amendment or supplement to the foregoing) in
reliance upon and in conformity with the Initial Purchaser Information.

 

(c) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by the Representatives,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

 

(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

 

 20 

 

SECTION 8.  Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement 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)
above but also the relative fault of the Company, on the one hand, and of the
Initial Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

 

The relative benefits received by the Company, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company,
on the one hand, and the total underwriting discount received by the Initial
Purchasers, on the other hand, bear to the aggregate initial offering price of
the Securities as set forth on the cover of the Final Offering Memorandum.

 

The relative fault of the Company, on the one hand, and the Initial Purchasers,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

 

The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

 

Notwithstanding the provisions of this Section 8, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities purchased by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 8, each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act and each Initial Purchaser’s Affiliates and selling agents shall have
the same rights to contribution as such Initial Purchaser, and each director of
the Company, each officer of the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company. The
Initial Purchasers’ respective obligations to contribute pursuant to this
Section 8 are several in proportion to the aggregate principal amount of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.

 

 21 

 

SECTION 9.  Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Initial Purchaser or its
Affiliates or selling agents, any person controlling any Initial Purchaser, its
officers or directors, any person controlling the Company and (ii) delivery of
and payment for the Securities.

 

SECTION 10.  Termination of Agreement.

 

(a)  Termination. The Representatives may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
in the judgment of the Representatives, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
General Disclosure Package or the Final Offering Memorandum, any Material
Adverse Effect, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the completion of the offering or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq Global Select Market, or (iv) if trading generally on
the NYSE MKT or the New York Stock Exchange or in the Nasdaq Global Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by order of the Commission, FINRA or any other governmental
authority, or (v) a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States or with respect
to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium
has been declared by either Federal or New York authorities.

 

(b)  Liabilities. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 7, 8, 9, 15,
16 and 17 shall survive such termination and remain in full force and effect.

 

SECTION 11.  Default by One or More of the Initial Purchasers. If one or more of
the Initial Purchasers shall fail at the Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the “Defaulted Securities”), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Initial Purchasers, or any other initial purchasers, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:

 

(i)  if the number of Defaulted Securities does not exceed 10% of the aggregate
principal amount of the Securities to be purchased on such date, each of the
non-defaulting Initial Purchasers shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Initial Purchasers, or

 

 22 

 

(ii)  if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the Initial Purchasers to purchase, and the Company to sell,
the Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Initial Purchaser
except that the provisions of Sections 1, 7, 8, 9, 15, 16 and 17 shall remain in
full force and effect.

 

No action taken pursuant to this Section shall relieve any defaulting Initial
Purchaser from liability in respect of its default.

 

In the event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the Initial
Purchasers to purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representatives or (ii) the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the General Disclosure Package or the Final Offering
Memorandum or in any other documents or arrangements. As used herein, the term
“Initial Purchaser” includes any person substituted for an Initial Purchaser
under this Section 11.

 

SECTION 12.  Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchasers shall
be directed to Merrill Lynch at One Bryant Park, New York, New York 10036,
attention of Syndicate Department (facsimile: (646) 855-3073), with a copy to
ECM Legal (facsimile: (212) 230-8730) and to Wells Fargo at 375 Park Avenue, New
York, New York 10152, Attention: Equity Syndicate Department (facsimile: (212)
214-5918); and notices to the Company shall be directed to it at Patrick
Industries, Inc., 107 West Franklin Street, P.O. Box 638, Elkhart, Indiana
46515, attention of Todd Cleveland, Chief Executive Officer (facsimile: (574)
524-7915), with a copy to McDermott Will & Emery LLP, 444 West Lake Street,
Chicago, IL 60606-0029, attention of Robert Schreck (facsimile: 312 984 7700).

 

SECTION 13.  No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the initial offering price of the
Securities and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company, on the one hand, and the several
Initial Purchasers, on the other hand, (b) in connection with the offering of
the Securities and the process leading thereto, each Initial Purchaser is and
has been acting solely as a principal and is not the agent or fiduciary of the
Company, any of its subsidiaries, or its respective stockholders, creditors,
employees or any other party, (c) no Initial Purchaser has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company with
respect to the offering of the Securities or the process leading thereto
(irrespective of whether such Initial Purchaser has advised or is currently
advising the Company or any of its subsidiaries on other matters) and no Initial
Purchaser has any obligation to the Company with respect to the offering of the
Securities except the obligations expressly set forth in this Agreement, (d) the
Initial Purchasers and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company, and (e) the Initial Purchasers have not provided any legal, accounting,
regulatory or tax advice with respect to the offering of the Securities and the
Company has consulted its own respective legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.

 

 23 

 

SECTION 14.  Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers, the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchasers, the Company
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.

 

SECTION 15.  Trial by Jury. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates) and
each of the Initial Purchasers hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.

 

SECTION 16.  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 WITHOUT REGARD TO ITS
CHOICE OF LAW PROVISIONS.

 

SECTION 17.  Consent to Jurisdiction; Waiver of Immunity. Any legal suit, action
or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby (“Related Proceedings”) shall be instituted in (i) the
federal courts of the United States of America located in the City and County of
New York, Borough of Manhattan or (ii) the courts of the State of New York
located in the City and County of New York, Borough of Manhattan (collectively,
the “Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a “Related Judgment”), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.

 

SECTION 18.  TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

SECTION 19.  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.

 

SECTION 20.  Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.

 

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Initial Purchasers and the Company in accordance with its terms.

 

 24 

 

  Very truly yours,       PATRICK INDUSTRIES, INC.         By: /s/ Todd M.
Cleveland         Title:   CEO

 

 25 

 

CONFIRMED AND ACCEPTED,

as of the date first above written:

 

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

 Wells Fargo Securities, LLC

 

BY: MERRILL LYNCH, PIERCE, FENNER & SMITH   INCORPORATED         By /s/ Kevin
Brillhart     Authorized Signatory         BY: WELLS FARGO SECURITIES, LLC      
  By /s/ Shiv Vasisht     Athorized Signatory  

 

For themselves and as Representatives of the other Initial Purchasers named in
Schedule A hereto.

 

 26 

 

SCHEDULE A

 

The initial offering price of the Securities shall be 100.00% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.

 

The purchase price to be paid by the Initial Purchasers for the Securities shall
be 97.25% of the principal amount thereof.

 

The interest rate on the Securities shall be 1.00% per annum.

 

   Principal Amount of  Name of Initial Purchaser  Securities        Merrill
Lynch, Pierce, Fenner & Smith Incorporated  $75,000,000  Wells Fargo Securities,
LLC  $52,500,000  KeyBanc Capital Markets Inc.  $6,450,000  Fifth Third
Securities, Inc.  $6,375,000  U.S. Bancorp Investments, Inc.  $6,375,000  Robert
W. Baird & Co. Incorporated  $825,000  CJS Securities, Inc.  $825,000  C.L. King
& Associates, Inc.  $825,000  Sidoti & Company, LLC  $825,000  Total 
$150,000,000 

  

Sch A-1

 

 

SCHEDULE B

 

Final Term Sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sch B-1

 

 

PRICING TERM SHEET STRICTLY CONFIDENTIAL

 

DATED January 17, 2018

 

[ex10-1_001.jpg] 

 

Patrick Industries, INC.

 

$150,000,000

 

1.00% CONVERTIBLE SENIOR NOTES DUE 2023

 

The information in this pricing term sheet supplements Patrick Industries,
Inc.’s preliminary offering memorandum, dated January 16, 2018 (the “Preliminary
Offering Memorandum”), and supersedes the information in the Preliminary
Offering Memorandum to the extent inconsistent with the information in the
Preliminary Offering Memorandum. In all other respects, this pricing term sheet
is qualified in its entirety by reference to the Preliminary Offering
Memorandum, including all documents incorporated by reference therein. Terms
used herein but not defined herein shall have the respective meanings as set
forth in the Preliminary Offering Memorandum. All references to dollar amounts
are references to U.S. dollars. Patrick Industries, Inc. has increased the size
of the offering to $150,000,000 (or $172,500,000 if the initial purchasers
exercise their over-allotment option to purchase additional Notes in full). The
final offering memorandum relating to the offering will reflect conforming
changes relating to such increase in the size of the offering.

  

Issuer:   Patrick Industries, Inc., an Indiana corporation.      
Ticker/Exchange for the Issuer’s Common Stock:  

“PATK”/The Nasdaq Global Select Market.

      Notes:   1.00% Convertible Senior Notes due 2023.       Principal Amount:
  $150,000,000, plus up to an additional $22,500,000 principal amount pursuant
to the initial purchasers’ over-allotment option.       Denominations:   $1,000
and integral multiples of $1,000 in excess thereof.       Maturity:   February
1, 2023, unless earlier repurchased or converted.       Interest Rate:   1.00%
per year.       Interest Payment Dates:   Interest will accrue from January 22,
2018 and will be payable semiannually in arrears on February 1 and August 1 of
each year, beginning on August 1, 2018.       Interest Record Dates:   January
15 and July 15 of each year, immediately preceding any February 1 or August 1
interest payment date, as the case may be.        Issue Price:   100% of
principal, plus accrued interest, if any, from the Settlement Date.       Trade
Date:   January 18, 2018.       Settlement Date:   January 22, 2018.

 

Sch B-2

 

 

Last Reported Sale Price of the Issuer’s Common Stock on January 17, 2018:  

$65.10 per share.

      Initial Conversion Rate:   11.3785 shares of the Issuer’s common stock per
$1,000 principal amount of Notes.       Initial Conversion Price:  
Approximately $87.89 per share of the Issuer’s common stock.       Conversion
Premium:   Approximately 35.0% above the last reported sale price of the
Issuer’s common stock on January 17, 2018.       Joint Book-Running Managers:  

Merrill Lynch, Pierce, Fenner & Smith

Incorporated 

Wells Fargo Securities, LLC

      Co-Managers:  

U.S. Bancorp Investments, Inc.

Fifth Third Securities, Inc.

KeyBanc Capital Markets Inc.

C.L. King & Associates, Inc.

CJS Securities, Inc.

Sidoti & Company, LLC

      CUSIP Number (144A):   703343AA1       ISIN (144A):   US703343AA11

 

Use of Proceeds:  

The Issuer estimates that the net proceeds from the offering will be
approximately $145.1 million (or $167.0 million if the initial purchasers
exercise their over-allotment option in full), after deducting fees and
estimated expenses.

 

The Issuer has entered into convertible note hedge transactions with certain of
the initial purchasers and/or their respective affiliates (the “option
counterparties”). The Issuer has also entered into warrant transactions with the
option counterparties. The Issuer intends to use approximately $11.6 million of
the net proceeds from the offering to pay the cost of the convertible note hedge
transactions (after such cost is partially offset by the proceeds to the Issuer
from the sale of the warrant transactions). The Issuer intends to use the
remainder of the net proceeds from the offering in alignment with its capital
allocation strategy, which includes funding future potential acquisitions,
investing in its infrastructure through strategic capital expenditures and
expansions and for general corporate purposes. Pending these uses, the Issuer
intends to use the remainder of the net proceeds from the offering to repay a
portion of the amounts due under its 2015 Credit Agreement (as defined in the
Preliminary Offering Memorandum). See “Use of Proceeds” in the Preliminary
Offering Memorandum.

 

If the initial purchasers exercise their over-allotment option, the Issuer
expects to sell additional warrants to the option counterparties and use a
portion of the net proceeds from the sale of the additional Notes, together with
the proceeds from the additional warrants, to enter into additional convertible
note hedge transactions with the option counterparties and for general corporate
purposes.

 

Sch B-3

 

 

Increase in Conversion Rate Upon Conversion in Connection with a Make-Whole
Fundamental Change:  

Following the occurrence of a “make-whole fundamental change” (as defined in the
Preliminary Offering Memorandum), the Issuer will increase the Conversion Rate
for a holder who elects to convert its Notes in connection with such make-whole
fundamental change in certain circumstances, as described under “Description of
Notes—Conversion Rights—Increase in conversion rate upon conversion upon a
make-whole fundamental change” in the Preliminary Offering Memorandum.

 

The following table sets forth the number of additional shares by which the
Conversion Rate will be increased per $1,000 principal amount of Notes for
conversions in connection with a make-whole fundamental change for each “stock
price” and “effective date” set forth below:

 

 

Stock Price

 

Effective Date  $65.10   $70.00   $80.00   $87.89   $100.00   $125.00  
$150.00   $250.00   $275.00   $300.00   $325.00   $350.00   $375.00   $400.00  
$450.00  January 22, 2018    3.9824    3.3992    2.5097    2.0070    1.4574  
 0.8089    0.4836    0.0903    0.0624    0.0440    0.0304    0.0205    0.0133  
 0.0081    0.0016  February 1, 2019    3.9824    3.3770    2.4387    1.9154  
 1.3523    0.7098    0.4038    0.0662    0.0454    0.0308    0.0205    0.0134  
 0.0081    0.0042    0.0002  February 1, 2020    3.9824    3.3221    2.3247  
 1.7783    1.2038    0.5802    0.3060    0.0433    0.0290    0.0192    0.0123  
 0.0074    0.0039    0.0014    0.0000  February 1, 2021    3.9824    3.2203  
 2.1433    1.5684    0.9875    0.4092    0.1897    0.0239    0.0159    0.0103  
 0.0062    0.0033    0.0012    0.0000    0.0000  February 1, 2022    3.9824  
 3.0228    1.8165    1.2050    0.6385    0.1827    0.0642    0.0104    0.0071  
 0.0044    0.0024    0.0008    0.0000    0.0000    0.0000  February 1, 2023  
 3.9824    2.9072    1.1215    0.0000    0.0000    0.0000    0.0000    0.0000  
 0.0000    0.0000    0.0000    0.0000    0.0000    0.0000    0.0000 

 

The exact stock prices and effective dates may not be set forth in the table
above, in which case:

 

  ● If the stock price is between two stock prices in the table above or the
effective date is between two effective dates in the table above, the number of
additional shares by which the Conversion Rate will be increased will be
determined by a straight-line interpolation between the number of additional
shares set forth for the higher and lower stock prices and the earlier and later
effective dates, as applicable, based on a 365-day year.         ● If the stock
price is greater than $450.00 per share (subject to adjustment in the same
manner as the stock prices set forth in the column headings of the table above
as described in the Preliminary Offering Memorandum), no additional shares will
be added to the Conversion Rate.         ● If the stock price is less than
$65.10 per share (subject to adjustment in the same manner as the stock prices
set forth in the column headings of the table above as described in the
Preliminary Offering Memorandum), no additional shares will be added to the
Conversion Rate.

 

Notwithstanding the foregoing, in no event will the Conversion Rate per $1,000
principal amount of Notes exceed 15.3609 shares of the Issuer’s common stock,
subject to adjustment in the same manner as the Conversion Rate as set forth
under “Description of Notes—Conversion Rights—Conversion rate adjustments” in
the Preliminary Offering Memorandum.

 

 

 

This communication is intended for the sole use of the person to whom it is
provided by the sender. This material is confidential and is for your
information only and is not intended to be used by anyone other than you. This
information does not purport to be a complete description of the Notes or the
offering thereof. This communication does not constitute an offer to sell or the
solicitation of an offer to buy any Notes in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation in such jurisdiction.

 

The Notes and any shares of the Issuer’s common stock issuable upon conversion
of the Notes have not been and will not be registered under the U.S. Securities
Act of 1933, as amended (the “Securities Act”), or any other securities laws,
and may not be offered or sold within the United States or any other
jurisdiction, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and any other
applicable securities laws. The initial purchasers are initially offering the
Notes only to qualified institutional buyers as defined in, and in reliance on,
Rule 144A under the Securities Act.

 

The Notes and any shares of the Issuer’s common stock issuable upon conversion
of the Notes are not transferable except in accordance with the restrictions
described under “Transfer Restrictions” in the Preliminary Offering Memorandum.

 

Any legends, disclaimers or other notices that may appear below are not
applicable to this communication and should be disregarded. Such legends,
disclaimers or other notices have been automatically generated as a result of
this communication having been sent via Bloomberg or another system.

  

[Remainder of Page Intentionally Blank]

 

Sch B-4

 

 

SCHEDULE C

 

Issuer Written Information

 

Final Term Sheet in the form set forth on Schedule B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sch C-1

 

 

SCHEDULE D

 

List of Persons and Entities Subject to Lock-up

 

Paul E. Hassler 

Joseph M. Cerulli

Todd M. Cleveland

John A. Forbes

Michael A. Kitson

Andy L. Nemeth

M. Scott Welch

Walter E. Wells

Jeffrey M. Rodino

Kip B. Ellis

Joshua A. Boone

Courtney A. Blosser

 

Sch D-1

 

 

SCHEDULE E

 

List of Subsidiaries

  

  1. Adorn Holdings. Inc. – Delaware Corporation

 

  2. Structural Composites, LLC – Indiana LLC

 

  3. Patrick Transportation, LLC – Indiana LLC

 

  4. Larry Methvin Installation, Inc. – California Corporation

 

  5. Shower Enclosures America, Inc. – California Corporation

 

  6. All Counties Glass, Inc. – California Corporation

 

  7. All State Glass, Inc. – California Corporation

 

  8. KLS Doors, LLC – California LLC

 

  9. Bathroom & Closet, LLC – Nevada LLC

 

  10. Transport Indiana, LLC – Indiana LLC

 

  11. Strong Dragon Investment Limited – Hong Kong Corporation

 

  12. Dura Shower Enclosures Co., Ltd – Chinese LLC

 

  13. Leisure Product Enterprises, LLC – Delaware LLC

 

  14. MEP Acquisition Corp – Missouri C Corporation

 

  15. JRL Ventures, LLC – Florida LLC

 

  16. FMT Acquisition Co., LLC – Delaware LLC

 

  17. Florida Marine Tanks, Inc. – Florida C Corporation

 

  18. FMT Land Holdings LLC – Delaware LLC

 

Sch E-1

 

 

Exhibit A

 

FORM OF LOCK-UP TO BE DELIVERED PURSUANT TO SECTION 5(g)

 

January 17, 2018

  

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

Wells Fargo Securities, LLC

 

as Representatives of the several Initial Purchasers

 

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, 3rd Floor

New York, New York 10152

  

Re:   Proposed Offering by Patrick Industries, Inc.

 

Dear Sirs:

  

The undersigned, a stockholder and an officer and/or director of Patrick
Industries, Inc., an Indiana corporation (the “Company”), understands that
Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and Wells
Fargo Securities, LLC (“Wells Fargo”) propose to enter into a Purchase Agreement
(the “Purchase Agreement”) with the Company providing for the offering (the
“Offering”) of the Company’s 1.00% Convertible Senior Notes due 2023 (the
“Securities”). For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the undersigned agrees with each initial
purchaser to be named in the Purchase Agreement that, during the period
beginning on the date hereof and ending on the date that is 45 days from the
date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, 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 any shares of the Company’s common stock, no
par value (the “Common Stock”) or any securities convertible into or exercisable
or exchangeable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition (collectively, the “Lock-Up Securities”), or exercise
any right with respect to the registration of any of the Lock-up Securities, or
file, cause to be filed or cause to be confidentially submitted any registration
statement in connection therewith, under the Securities Act of 1933, as amended
(except that the undersigned may take actions to register a Registration
Statement on Form S-8 on behalf of the Company), 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 Lock-Up
Securities, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise.

 

Exh. A-1

 

 

Notwithstanding the foregoing, and subject to the conditions below, the
undersigned may sell or transfer the Lock-Up Securities without the prior
written consent of Merrill Lynch, provided that (1) Merrill Lynch receive a
signed lock-up agreement for the balance of the lockup period from each donee,
trustee, distributee, or transferee, as the case may be, (2) except with respect
to clause (i) below, such transfers are not required to be reported with the
Securities and Exchange Commission on Form 4 in accordance with Section 16 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (3)
except with respect to clause (i) below, the undersigned does not otherwise
voluntarily effect any public filing or report regarding such transfers:

  

  (i) by will or intestate succession; or

 

  (ii) as a bona fide gift or gifts; or

 

  (iii) to any trust for the direct or indirect benefit of the undersigned or
the immediate family of the undersigned (for purposes of this lock-up agreement,
“immediate family” shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin); or

 

  (iv) as a distribution to limited partners or stockholders of the undersigned;
or

 

  (v) to the undersigned’s affiliates or to any investment fund or other entity
controlled or managed by the undersigned.

 

Furthermore, notwithstanding the foregoing, (1) the undersigned may sell shares
of Common Stock of the Company purchased by the undersigned on the open market
following the Offering if and only if (i) such sales are not required to be
reported in any public report or filing with the Securities and Exchange
Commission, or otherwise and (ii) the undersigned does not otherwise voluntarily
effect any public filing or report regarding such sales; (2) the undersigned may
transfer to the Company shares of Common Stock upon the vesting, conversion,
exercise or exchange of securities convertible into or exercisable or
exchangeable for Common Stock granted pursuant to the Company’s equity incentive
plans (A) deemed to occur upon the cashless exercise of such securities provided
that the shares received upon exercise shall continue to be subject to the
restrictions on transfer set forth in this lock-up agreement and provided,
further that any public report or filing required to be made under Section 16(a)
of the Exchange Act shall clearly indicate in the footnotes thereto that the
filing relates to the “cashless” or “net” exercise of a stock option, that no
shares were sold by the reporting person and that the shares received upon
exercise of the stock option are subject to a lock-up agreement with the Initial
Purchaser of the Offering, and provided further that no other public
announcement shall be required or shall be made voluntarily in connection with
such transfer or (B) for the purpose of paying the exercise price of such
securities or for paying taxes (including estimated taxes) due as a result of
the exercise of such securities provided that any public report or filing
required to be made under Section 16(a) of the Exchange Act shall clearly
indicate in the footnotes thereto that the purpose of such transfer is to cover
such tax obligations or the payment of taxes due in connection with the vesting
event, and provided further that no other public announcement shall be required
or shall be made voluntarily in connection with such transfer; and (3) nothing
herein shall prevent the undersigned from selling Lock-Up Securities under a
10b5-l trading plan existing as of the date hereof that complies with Rule
10b5-l under the Exchange Act and has been disclosed to Merrill Lynch and its
counsel.

  

The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.

  

The undersigned understands, and you agree, that (i) if the Purchase Agreement
does not become effective by March 30, 2018, (ii) if the Company terminates the
Offering or (iii) if the Purchase Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Securities to be sold thereunder, the undersigned shall be
released from all obligations under this lock-up agreement.

 

  Very truly yours,         Signature:     Print Name:  

 

 

Exh. A-2