Exhibit 10.1
 

 

EVOLENT HEALTH, INC.

1.500% Convertible Senior Notes due 2025

Purchase Agreement

October 17, 2018
J.P. Morgan Securities LLC
Goldman Sachs & Co. LLC
As Representatives of the
 several Initial Purchasers listed
 in Schedule 1 hereto

c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282

Ladies and Gentlemen:

Evolent Health, Inc., a Delaware corporation (the “Company”), proposes to issue
and sell to the several initial purchasers listed in Schedule 1 hereto (the
“Initial Purchasers”), for whom you are acting as representatives (the
“Representatives”), $150.0 million principal amount of its 1.500% Convertible
Senior Notes due 2025 (the “Firm Securities”) and, at the option of the Initial
Purchasers, up to an additional $22.5 million principal amount of its 1.500%
Convertible Senior Notes due 2025 (the “Option Securities”) if and to the extent
that the Initial Purchasers shall have determined to exercise the option to
purchase such 1.500% Convertible Senior Notes due 2025 granted to the Initial
Purchasers in Section 2 hereof.  The Firm Securities and the Option Securities
are herein referred to as the “Securities.” The Securities will be convertible
into shares (the “Underlying Securities”) of Class A common stock of the
Company, par value $0.01 per share (the “Class A Common Stock”).  The Securities
will be issued pursuant to an Indenture to be dated as of October 22, 2018 (the
“Indenture”), between the Company and U.S. Bank National Association, as trustee
(the “Trustee”).  Class A Common Stock of the Company, together with the shares
of Class B Common Stock, par value $0.01 per share, of the Company (the “Class B
Common Stock”), is referred to herein as the “Stock.”

Pursuant to the Agreement and Plan of Merger dated as of September 7, 2018, by
and among the Company, Evolent Health LLC, a Delaware limited liability company
(“Evolent Health”), Element Merger Sub, Inc., a Delaware limited liability
company and wholly-owned subsidiary of Evolent Health (“Merger Sub”), NCIS
Holdings, Inc., a Delaware corporation (“New Century”), and New Century
Investment, LLC, in its capacity as representative of the equityholders of New
Century (as amended, the “New Century Merger Agreement”), the Company acquired
(the “New Century Acquisition”) New Century’s business (the “Acquired
Business”). Immediately following payment of cash and the issuance of Class B
Common Stock and a corresponding number of Evolent Health’s Class B common units
upon closing the New Century Acquisition, Merger Sub merged with and into New
Century, with New Century surviving as a wholly-owned subsidiary of Evolent
Health.
 

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The Company hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and sale of the Securities, as follows:

1.            Offering Memorandum and Transaction Information.  The Securities
will be sold to the Initial Purchasers without being registered under the
Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an
exemption therefrom.  The Company has prepared a preliminary offering memorandum
dated October 16, 2018 (the “Preliminary Offering Memorandum”) and will prepare
an offering memorandum dated the date hereof (the “Offering Memorandum”) setting
forth information concerning the Company and the Securities.  Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering Memorandum
will be, delivered by the Company to the Initial Purchasers pursuant to the
terms of this purchase agreement (this “Agreement”).  The Company hereby
confirms that it has authorized the use of the Preliminary Offering Memorandum,
the other Time of Sale Information (as defined below) and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement.  References
herein to the Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum shall be deemed to refer to and include any document
incorporated by reference therein, and any reference to “amend,” “amendment” or
“supplement” with respect to the Preliminary Offering Memorandum or the Offering
Memorandum shall be deemed to refer to and include any documents filed after
such date and incorporated by reference therein. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Time of Sale
Information and the Offering Memorandum.

At or prior to the Time of Sale (as defined below), the Company had prepared the
following information (collectively, the “Time of Sale Information”): the
Preliminary Offering Memorandum, as supplemented and amended by the written
communications listed on Annex A hereto.

“Time of Sale” means 7:39 p.m., New York City time, on October 17, 2018.
 
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2.            Purchase and Resale of the Securities.  (a) The Company agrees to
issue and sell the Firm Securities to the several Initial Purchasers as provided
in this Agreement, and each Initial Purchaser, on the basis of the
representations, warranties and agreements set forth herein and subject to the
conditions set forth herein, agrees, severally and not jointly, to purchase from
the Company the respective principal amount of Firm Securities set forth
opposite such Initial Purchasers’ name in Schedule 1 hereto at a price equal to
97.000% of the principal amount thereof (the “Purchase Price”) plus accrued
interest, if any, from October 22, 2018 to the Closing Date (as defined below).
 
In addition, the Company agrees to issue and sell the Option Securities to the
several Initial Purchasers as provided in this Agreement, and the Initial
Purchasers, on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, shall have the
option to purchase, severally and not jointly, from the Company the Option
Securities at the Purchase Price plus accrued interest, if any, from  October
22, 2018 to the date of payment and delivery.

If any Option Securities are to be purchased, the principal amount of Option
Securities to be purchased by each Initial Purchaser shall be the principal
amount of Option Securities which bears the same ratio to the aggregate
principal amount of Option Securities being purchased as the principal amount of
Firm Securities set forth opposite the name of such Initial Purchaser in
Schedule 1 hereto (or such amount increased as set forth in Section 10 hereof)
bears to the aggregate principal amount of Firm Securities being purchased from
the Company by the several Initial Purchasers, subject, however, to such
adjustments to eliminate Securities in denominations other than $1,000 as the
Representatives in their sole discretion shall make.

The Initial Purchasers may exercise the option to purchase the Option Securities
at any time in whole, or from time to time in part, on or before the thirtieth
day following the date of this Agreement, by written notice from the
Representative to the Company.  Such notice shall set forth the aggregate
principal amount of Option Securities plus accrued interest as to which the
option is being exercised and the date and time when the Option Securities are
to be delivered and paid for which may be the same date and time as the Closing
Date (as hereinafter defined) but shall not be earlier than the Closing Date nor
later than the tenth full business day (as hereinafter defined) after the date
of such notice (unless such time and date are postponed in accordance with the
provisions of Section 10 hereof).  Any such notice shall be given at least two
business days prior to the date and time of delivery specified therein.

(b)            The Company understands that the Initial Purchasers intend to
offer the Securities for resale on the terms set forth in the Time of Sale
Information.  Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:

(i)            it is a qualified institutional buyer within the meaning of Rule
144A under the Securities Act (a “QIB”) and an accredited investor within the
meaning of Rule 501(a)  of Regulation D under the Securities Act (“Regulation
D”);

(ii)            it has not solicited offers for, or offered or sold, and will
not solicit offers for, or offer or sell, the Securities by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(a)(2) of the Securities Act; and
 
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(iii)            it has not solicited offers for, or offered or sold, and will
not solicit offers for, or offer or sell, the Securities as part of the initial
offering except to persons whom it reasonably believes to be QIBs in
transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in
connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A.

(c)            Each Initial Purchaser acknowledges and agrees that the Company
and, for purposes of the “no registration” opinions to be delivered to the
Initial Purchasers pursuant to Sections 6(f) and 6(g), counsel for the Company
and counsel for the Initial Purchasers, respectively, may rely upon the accuracy
of the representations and warranties of the Initial Purchasers, and compliance
by the Initial Purchasers with their agreements, contained in paragraph (b)
above and each Initial Purchaser hereby consents to such reliance.

(d)            The Company acknowledges and agrees that the Initial Purchasers
may offer and sell Securities to or through any affiliate of an Initial
Purchaser and that any such affiliate may offer and sell Securities purchased by
it to or through any Initial Purchaser.
 
(e)            Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives in the case of the Firm Securities, at the offices of Davis Polk
& Wardwell LLP, 450 Lexington Avenue, New York, New York 10017, at 10:00 A.M.,
New York City time, on October 22, 2018, or at such other time or place on the
same or such other date, not later than the fifth business day thereafter, as
the Representatives and the Company may agree upon in writing or, in the case of
the Option Securities, on the date and at the time and place specified by the
Representatives in the written notice of the Initial Purchasers’ election to
purchase such Option Securities.  The time and date of such payment for the Firm
Securities is referred to herein as the “Closing Date” and the time and date for
such payment for the Option Securities, if other than the Closing Date, is
herein referred to as the “Additional Closing Date.”

Payment for the Securities to be purchased on the Closing Date or the Additional
Closing Date, as the case may be, shall be made against delivery to the nominee
of The Depository Trust Company (“DTC”), for the respective accounts of the
several Initial Purchasers of the Securities of one or more global notes
representing the Securities to be purchased on such date (collectively, the
“Global Note”), with any transfer taxes payable in connection with the sale of
such Securities duly paid by the Company.  The Global Note will be made
available for inspection by the Representatives at the office of Davis Polk &
Wardwell LLP set forth above not later than 1:00 P.M., New York City time, on
the business day prior to the Closing Date or the Additional Closing Date, as
the case may be.
 
 
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(f)            Each of the Company and Evolent Health acknowledges and agrees
that each Initial Purchaser is acting solely in the capacity of an arm’s length
contractual counterparty to the Company with respect to the offering of
Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or Evolent Health or any other person.  Additionally,
neither the Representatives nor any other Initial Purchaser is advising the
Company or Evolent Health or any other person as to any legal, tax, investment, 
accounting or regulatory matters in any jurisdiction.  The Company and Evolent
Health shall consult with their own advisors concerning such matters and shall
be responsible for making their own independent investigation and appraisal of
the transactions contemplated hereby, and the Initial Purchasers shall have no
responsibility or liability to the Company or Evolent Health with respect
thereto. Any review by the Representatives or any Initial Purchaser of the
Company or Evolent Health, the transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the benefit of the
Representatives or such Initial Purchaser and shall not be on behalf of the
Company or Evolent Health.

3.            Representations and Warranties.  Each of the Company and Evolent
Health jointly and severally represents and warrants to each Initial Purchaser
that:

(a)            Preliminary Offering Memorandum.  The Preliminary Offering
Memorandum, as of its date, did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that neither the Company nor Evolent Health makes any
representation or warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company and Evolent Health in writing by such Initial
Purchaser through the Representatives expressly for use in any Preliminary
Offering Memorandum, it being understood and agreed that the only such
information furnished by any Initial Purchaser consists of the information
described as such in Section 7(b) hereof.

(b)            Time of Sale Information. The Time of Sale Information, at the
Time of Sale, did not, and as of the Closing Date and as of the Additional
Closing Date, as the case may be, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that neither the Company nor Evolent Health makes
any representation or warranty with respect to any statements or omissions made
in reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company and Evolent Health in writing by such Initial
Purchaser through the Representatives expressly for use in such Time of Sale
Information, it being understood and agreed that the only such information
furnished by any Initial Purchaser consists of the information described as such
in Section 7(b) hereof.  No statement of material fact included in the Offering
Memorandum has been omitted from the Time of Sale Information.
 
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(c)            Additional Written Communications.  Other than the Preliminary
Offering Memorandum and the Offering Memorandum, neither the Company nor Evolent
Health (including their agents and representatives, other than the Initial
Purchasers in their capacity as such) has prepared, used, authorized, approved
or referred to and will not prepare, use, authorize, approve or refer to any
“written communication” (as defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Company or Evolent Health or their respective
agents and representatives (other than a communication referred to in clauses
(i), (ii) and (iii) below) an “Issuer Written Communication”) other than (i) the
Preliminary Offering Memorandum, (ii) the Offering Memorandum, (iii) the
documents listed on Annex A hereto, including a term sheet substantially in the
form of Annex B hereto, which constitute part of the Time of Sale Information,
and (iv) each electronic road show and any other written communications approved
in writing in advance by the Representatives.  Each such Issuer Written
Communication and each such electronic road show does not conflict in any
material respect with the information contained in the Time of Sale Information,
and when taken together with the Time of Sale Information, did not, and as of
the Closing Date and as of the Additional Closing Date, as the case may be, will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that neither
the Company nor Evolent Health makes any representation or warranty with respect
to any statements or omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company and Evolent Health in writing by such Initial
Purchaser through the Representatives expressly for use in such Issuer Written
Communication, it being understood and agreed that the only such information
furnished by any Initial Purchaser consists of the information described as such
in Section 7(b) hereof.
 
(d)            Offering Memorandum.  As of the date of the Offering Memorandum
and as of the Closing Date and as of the Additional Closing Date, as the case
may be, the Offering Memorandum does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that neither the Company nor Evolent
Health makes any representation or warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Initial Purchaser furnished to the Company and Evolent Health in writing by
such Initial Purchaser through the Representatives expressly for use in the
Offering Memorandum, it being understood and agreed that the only such
information furnished by any Initial Purchaser consists of the information
described as such in Section 7(b) hereof.

(e)            [Reserved.]

(f)            New Century Information.  The financial information relating to
the Acquired Business included in the Time of Sale Information and the Offering
Memorandum presents fairly in all material respects the information shown
therein. The financial and other information of the Acquired Business, as of the
date hereof, is a true and accurate measurement of the financial or operating
data purported to be represented for the periods presented, in all material
respects.

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(g)            Incorporated Documents.  The documents incorporated by reference
in the Offering Memorandum or the Time of Sale Information, when they were filed
with the Securities and Exchange Commission (the “Commission”) conformed or will
conform, as the case may be, in all material respects to the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the “Exchange Act”) and such documents
did not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

(h)            Financial Statements of the Company.  The financial statements
(including the related notes thereto) of the Company and its consolidated
subsidiaries included or incorporated by reference in the Time of Sale
Information and the Offering Memorandum comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly in all material respects the financial position
of the Company and its consolidated subsidiaries as of the dates indicated and
the results of their operations and the changes in their cash flows for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles (“GAAP”) in the United States
applied on a consistent basis throughout the periods covered thereby; the other
financial information (other than (i) the financial statements of Evolent Health
and (ii) financial information of the Acquired Business) included or
incorporated by reference in the Time of Sale Information and the Offering
Memorandum has been derived from the accounting records of the Company and its
consolidated subsidiaries and presents fairly in all material respects the
information shown thereby.

(i)            Financial Statements of Evolent Health.  The financial statements
(including the related notes thereto) of Evolent Health included in the Time of
Sale Information and the Offering Memorandum comply in all material respects
with the applicable requirements of the Securities Act and present fairly in all
material respects the financial position of Evolent Health as of the dates
indicated and the results of its operations and the changes in its cash flows
for the periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods covered thereby, and any
supporting schedules included in the Time of Sale Information and Offering
Memorandum present fairly in all material respects the information required to
be stated therein.

(j)            No Material Adverse Change.  Except as disclosed in the Time of
Sale Information and the Offering Memorandum, since the date of the most recent
financial statements of the Company and Evolent Health included or incorporated
by reference in the Time of Sale Information and the Offering Memorandum, (i)
there has not been any change in the capital stock (other than the issuance of
shares of Stock upon exercise of stock options and warrants described as
outstanding in, the grant and forfeiture of options and awards under existing
equity incentive plans described in, the Time of Sale Information and the
Offering Memorandum and the issuance of Stock in connection with the New Century
Acquisition), any material change in short-term debt or long-term debt of the
Company, Evolent Health or the Company’s other subsidiaries or any dividend or
distribution of any kind declared, set aside for payment, paid or made by the
Company or Evolent Health on any class of capital stock,  (ii) there has not
been any material adverse change with respect to the Company, Evolent Health and
the Company’s other subsidiaries, taken as a whole, or any development that
would reasonably be expected to result in a material adverse change, in or
affecting the business, properties, management, financial position,
stockholders’ or members’ equity, as applicable, results of operations or
prospects of the Company, Evolent Health and the Company’s other subsidiaries,
taken as a whole; (iii) none of the Company, Evolent Health, or the Company’s
other subsidiaries has entered into any transaction or agreement (whether or not
in the ordinary course of business) that is material to the Company, Evolent
Health and  the Company’s other subsidiaries, taken as a whole, or incurred any
liability or obligation, direct or contingent, that is material to the Company,
Evolent Health, the Company’s other subsidiaries, taken as a whole; and (iv)
none of the Company, Evolent Health or the Company’s other subsidiaries has
sustained any loss or interference with its business that is material to the
Company, Evolent Health, or the Company’s other subsidiaries, taken as a whole,
and that is either from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or regulatory
authority.

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(k)            Organization and Good Standing.  The Company, Evolent Health and
the Company’s other subsidiaries have been duly organized and are validly
existing and in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business and are in good standing in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the failure to
be so qualified or in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, stockholders’ or members’
equity, results of operations or prospects of the Company, Evolent Health and
the Company’s other subsidiaries, taken as a whole, or on the performance by the
Company and Evolent Health of their obligations under the Transaction Documents
(as defined below) (a “Material Adverse Effect”).  Neither the Company nor
Evolent Health owns or controls, directly or indirectly, any corporation,
association or other entity other than, in the case of the Company, the
subsidiaries listed on Schedule 3 hereto.

(l)            Capitalization.  The Company has an authorized capitalization as
set forth in the Time of Sale Information and the Offering Memorandum; and the
outstanding shares of capital stock of the Company and membership interests of
Evolent Health have been duly and validly authorized and issued and are fully
paid and non-assessable and are not subject to any pre-emptive or similar
rights; except as described in or expressly contemplated by the Time of Sale
Information and the Offering Memorandum and other than options in the aggregate
not exceeding $1 million in fair market value as of the date of this Agreement,
there are no outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the
Company or any membership interests in Evolent Health or the Company’s other
subsidiaries or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or of any membership interests of Evolent Health or the Company’s other
subsidiaries, any such convertible or exchangeable securities or any such
rights, warrants or options; the capital stock of the Company and the membership
interests of Evolent Health conform in all material respects to the description
thereof contained in the Time of Sale Information and the Offering Memorandum;
and all the outstanding membership interests of Evolent Health and the Company’s
other subsidiaries that are owned directly or indirectly by the Company are
owned free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party.

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(m)            Stock Options.  Except as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, with
respect to the stock options (the “Stock Options”) granted pursuant to the
stock-based compensation plans of the Company and Evolent Health, including the
Evolent Health Holdings, Inc. 2011 Equity Incentive Plan and the Evolent Health,
Inc. 2015 Omnibus Incentive Compensation Plan, as amended, each as described in
the Time of Sale Information and Offering Memorandum (the “Company Stock
Plans”), (i) each grant of a Stock Option was duly authorized no later than the
date on which the grant of such Stock Option was by its terms to be effective
(the “Grant Date”) by all necessary corporate action, including, as applicable,
approval by the board of directors of the Company (or a duly constituted and
authorized committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and, to the knowledge of the
Company (other than with respect to due execution and delivery by the Company),
the award agreement governing such grant (if any) was duly executed and
delivered by each party thereto, (ii) each such grant was made in accordance
with the terms of the Company Stock Plans, the Exchange Act and all other
applicable laws and regulatory rules or requirements and (iii) each such grant
was properly accounted for in accordance with GAAP in the financial statements
(including the related notes) of the Company and Evolent Health.  There is no
and has been no policy or practice of the Company or Evolent Health of granting
Stock Options prior to, or otherwise coordinating the grant of Stock Options
with, the release or other public announcement of material information regarding
the Company or Evolent Health or their respective subsidiaries or their results
of operations or prospects.

(n)            Due Authorization.  Each of the Company and Evolent Health has
full right, power and authority to execute and deliver this Agreement, the
Indenture and the Securities (collectively, the “Transaction Documents”) and to
perform its obligations hereunder and thereunder; and all action required to be
taken for the due and proper authorization, execution and delivery by the
Company and Evolent Health, to the extent a party thereto, of each of the
Transaction Documents and the consummation by it of the transactions
contemplated hereby and thereby or by the Time of Sale Information and the
Offering Memorandum has been duly and validly taken.

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(o)            Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by each of the Company and Evolent Health.

(p)            Interests.  All of the membership interests of Evolent Health
outstanding as of the Closing Date have been duly authorized and when issued,
fully paid and validly issued and, to the extent owned by the Company, will be
owned free and clear of any liens, encumbrances or claims.

(q)            The Indenture.   The Indenture has been duly authorized by the
Company and, when duly executed and delivered in accordance with its terms by
each of the parties thereto, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally or by equitable
principles relating to enforceability (collectively, the “Enforceability
Exceptions”).

(r)            The Securities.  The Securities have been duly authorized by the
Company and, when duly executed, authenticated, issued and delivered as provided
in the Indenture and paid for as provided herein, will be duly and validly
issued and outstanding and will constitute valid and legally binding obligations
of the Company enforceable against the Company in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits
of the Indenture.

(s)            The Underlying Securities.  Upon issuance and delivery of the
Securities in accordance with this Agreement and the Indenture, the Securities
will be convertible at the option of the holder thereof into shares of the
Underlying Securities in accordance with the terms of the Indenture and the
Securities; the maximum number of shares of Class A Common Stock issuable upon
conversion of the Securities (including the maximum number of additional shares
of Class A 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) (the “Maximum
Number of Underlying Securities”) have been duly authorized and reserved and,
when issued upon conversion of the Securities in accordance with the terms of
the Indenture and the Securities, will be validly issued, fully paid and
non-assessable, and the issuance of such Maximum Number of Underlying Securities
will not be subject to any preemptive or similar rights.

(t)            Descriptions of the Transaction Documents.  Each Transaction
Document conforms in all material respects to the description thereof contained
in the Time of Sale Information and the Offering Memorandum.

(u)            No Violation or Default.  None of the Company, Evolent Health or
any of the Company’s other subsidiaries is (i) in violation of its charter or
by-laws or similar organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company,  Evolent Health or any of the
Company’s other subsidiaries is a party or by which the Company, Evolent Health
or any of the Company’s other subsidiaries is bound or to which any of the
property or assets of the Company, Evolent Health or any of the Company’s other
subsidiaries is subject; or (iii) in violation of any law or statute applicable
to the Company, Evolent Health or the Company’s other subsidiaries or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority having jurisdiction over the Company, Evolent Health or
the Company’s other subsidiaries except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.

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(v)            No Conflicts.  The execution and delivery by the Company and
Evolent Health of this Agreement, the performance by the Company and Evolent
Health of each of the Transaction Documents to which it is a party, the issuance
and sale by the Company of the Securities (including the issuance of the Maximum
Number of Underlying Securities upon conversion thereof) and the consummation by
the Company of the transactions contemplated by the Transaction Documents or the
Time of Sale Information and the Offering Memorandum will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company, Evolent Health
or the Company’s other subsidiaries pursuant to any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company,
Evolent Health or any of the Company’s other subsidiaries is a party or by which
the Company, Evolent Health or any of the Company’s other subsidiaries is bound
or to which any of the property or assets of the Company, Evolent Health or any
of the Company’s other subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational documents of
the Company, Evolent Health or the Company’s other subsidiaries or (iii) result
in the violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (i) and (iii) above, for any such conflict,
breach, violation or default that would not, individually or in the aggregate,
have a Material Adverse Effect.

(w)            No Consents Required.  No consent, approval, authorization,
order, license, registration or qualification of or with any court or arbitrator
or governmental or regulatory authority is required for performance by the
Company and Evolent Health of each of the Transaction Documents to which it is a
party, the issuance and sale of the Securities by the Company (including the
issuance of the Maximum Number of Underlying Securities upon conversion thereof)
and the consummation of the transactions contemplated by the Transaction
Documents or the Time of Sale Information and the Offering Memorandum, except
for such consents, approvals, authorizations, orders and registrations or
qualifications that (i) have been obtained or made or (ii) may be required by
the New York Stock Exchange (the “Exchange”) and under applicable state
securities laws in connection with the purchase and resale of the Securities by
the Initial Purchasers.

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(x)            Legal Proceedings.  Except as described in the Time of Sale
Information and the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings, including by the
Federal Trade Commission and the U.S. Department of Health and Human Services
(“HHS”) and any office contained therein, pending to which the Company, Evolent
Health or any of the Company’s other subsidiaries is or, to the knowledge of the
Company or Evolent Health, may reasonably be expected to become a party or to
which any property of the Company,  Evolent Health or the Company’s other
subsidiaries, is or may reasonably be expected to become the subject that,
individually or in the aggregate, if determined adversely to the Company,
Evolent Health or the Company’s other subsidiaries, could reasonably be expected
to have a Material Adverse Effect; no such investigations, actions, suits or
proceedings are, to the knowledge of the Company, Evolent Health or the
Company’s other subsidiaries, threatened or contemplated by any governmental or
regulatory authority or threatened by others; (i) there are no material current
or pending legal, governmental or regulatory actions, suits or proceedings that
would be required under the Securities Act to be described in a registration
statement or prospectus to be filed with the Commission that are not so
described in the Time of Sale Information and the Offering Memorandum and (ii)
there are no statutes, regulations or contracts or other documents that would be
required by the Securities Act to be described in a registration statement to be
filed with the Commission and that is not so described in the each of Time of
Sale Information and the Offering Memorandum; and to the knowledge of the
Company or Evolent Health, there is no complaint to or audit, proceeding,
investigation (formal or informal) or claim currently pending or threatened
against any of the Company’s or Evolent Health’s customers (specific to the
customer’s use of the products or services of the Company or Evolent Health) by
the Federal Trade Commission, HHS, or any similar authority in any jurisdiction
or any other governmental entity, or by any person in respect of the collection,
use or disclosure of Personal Data by the Company or Evolent Health that,
individually or in the aggregate, if determined adversely to such customer,
could reasonably be expected to have a material adverse effect on such customer
or a material adverse effect on the Company.

(y)            Independent Accountants.  PricewaterhouseCoopers LLP, who has
audited certain financial statements of the Company and Evolent Health, is an
independent registered public accounting firm with respect to the Company and
Evolent Health within the applicable rules and regulations adopted by the
Commission and the Public Company Accounting Oversight Board (United States) and
as required by the Securities Act.

(z)            Title to Real and Personal Property.  The Company, Evolent Health
and the Company’s other subsidiaries have good and marketable title in fee
simple (in the case of real property) to, or have valid and marketable rights to
lease or otherwise use, all items of real and personal property and assets
(other than Intellectual Property (as defined below)) that are material to the
respective businesses of the Company, Evolent Health and the Company’s other
subsidiaries, in each case free and clear of all liens, encumbrances, claims and
defects and imperfections of title except those that (i) do not materially
interfere with the use made and currently proposed to be made of such property
by the Company, Evolent Health and the Company’s other subsidiaries or (ii)
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

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(aa)            Title to Intellectual Property.  The Company, Evolent Health and
the Company’s other subsidiaries own or possess adequate rights to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, domain names, copyrights, licenses,
software and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures) and
other intellectual property rights (“Intellectual Property”) necessary for the
conduct of their respective businesses as currently conducted and as currently
proposed to be conducted, and, to the knowledge of the Company, Evolent Health
or the Company’s other subsidiaries, the conduct of their respective businesses
will not conflict in any material respect with any such rights of others. 
Except as could not reasonably be expected to result in a Material Adverse
Effect, the Company, Evolent Health and the Company’s other subsidiaries have
not received any notice of any claim (i) alleging any infringement or
misappropriation of, or conflict with, any Intellectual Property rights of any
third party or (ii) challenging the validity, scope, enforceability or ownership
of any Intellectual Property owned by the Company, Evolent Health and the
Company’s other subsidiaries.  The Company, Evolent Health and the Company’s
other subsidiaries have taken reasonable steps in accordance with normal
industry practice to maintain the confidentiality of all know-how, trade secrets
and confidential information owned, used or held for use by the Company, Evolent
Health or the Company’s other subsidiaries, and no such trade secrets or
confidential information have been disclosed other than to employees,
representatives and agents of the Company, Evolent Health or the Company’s other
subsidiaries, or parties who are bound by written confidentiality agreements,
except as could not reasonably be expected to result in a Material Adverse
Effect.

(bb)            No Undisclosed Relationships.  No relationship, direct or
indirect, exists between or among the Company, Evolent Health or the Company’s
other subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, Evolent Health or the Company’s other
subsidiaries, on the other, that would be required by the Securities Act to be
described in a registration statement to be filed with the Commission and that
is not so described in each of Time of Sale Information and the Offering
Memorandum.

(cc)            Investment Company Act.  After giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Time of Sale Information and the Offering Memorandum, neither the Company
nor Evolent Health is required to register as an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Investment Company Act”).

(dd)            Taxes.  The Company and its subsidiaries have paid or accrued in
their respective financial statements included in the Time of Sale Information
all federal, state, local and foreign taxes required to be paid and filed all
tax returns required to be filed through the date hereof, and except as
otherwise disclosed in the Time of Sale Information and the Offering Memorandum,
there is no tax deficiency that has been, or could reasonably be expected to be,
asserted against the Company, its subsidiaries or any of their respective
properties or assets, except where such failure to pay or file or such
deficiency would not reasonably be expected to result in a Material Adverse
Effect.  Evolent Health is treated as a partnership for U.S. federal income tax
purposes.

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(ee)            Licenses and Permits.  The Company, Evolent Health and the
Company’s other subsidiaries possess all licenses, certificates, permits and
other authorizations issued by, and have made all declarations and filings with,
the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as described in the
Time of Sale Information and the Offering Memorandum, except where the failure
to possess or make the same would not, individually or in the aggregate, have a
Material Adverse Effect; and except as described in the Time of Sale Information
and the Offering Memorandum, none of the Company, Evolent Health or any of the
Company’s other subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course, except where such
revocation, modification or renewal would not reasonably be expected to result
in a Material Adverse Effect.

(ff)            No Labor Disputes.  No labor disturbance by or dispute with
employees of the Company, Evolent Health or the Company’s other subsidiaries
exists or, to the knowledge of the Company or Evolent Health, is contemplated or
threatened, and neither the Company nor Evolent Health is aware of any existing
or imminent labor disturbance by, or dispute with, the employees of any of their
or their respective subsidiaries’ principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.

(gg)            Compliance with and Liability under Environmental Laws.  (i) The
Company, Evolent Health and the Company’s other subsidiaries (a) are, and at all
prior times were, in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, requirements, decisions, judgments,
decrees, orders and the common law relating to pollution or the protection of
the environment, natural resources or human health or safety, including those
relating to the generation, storage, treatment, use, handling, transportation,
Release or threat of Release of Hazardous Materials (collectively,
“Environmental Laws”), (b) have received and are in compliance with all permits,
licenses, certificates or other authorizations or approvals required of them
under applicable Environmental Laws to conduct their respective businesses, (c)
have not received notice of any actual or potential liability under or relating
to, or actual or potential violation of, any Environmental Laws, including for
the investigation or remediation of any Release or threat of Release of
Hazardous Materials, and have no knowledge of any event or condition that would
reasonably be expected to result in any such notice, (d) are not conducting or
paying for, in whole or in part, any investigation, remediation or other
corrective action pursuant to any Environmental Law at any location, and (e) are
not a party to any order, decree or agreement that imposes any obligation or
liability under any Environmental Law, and (ii) there are no costs or
liabilities associated with Environmental Laws of or relating to the Company,
Evolent Health or the Company’s other subsidiaries, except in the case of each
of (i) and (ii) above, for any such matter, as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and (iii)
except as described in the Time of Sale Information and the Offering Memorandum,
(a) there are no proceedings that are pending, or that are known to be
contemplated, against the Company, Evolent Health or the Company’s other
subsidiaries under any Environmental Laws in which a governmental entity is also
a party, other than such proceedings regarding which it is reasonably believed
no monetary sanctions of $100,000 or more will be imposed, (b) the Company,
Evolent Health and the Company’s other subsidiaries are not aware of any facts
or issues regarding compliance with Environmental Laws, or liabilities or other
obligations under Environmental Laws, including the Release or threat of Release
of Hazardous Materials, that could reasonably be expected to have a material
effect on the capital expenditures, earnings or competitive position of the
Company,  Evolent Health and the Company’s other subsidiaries, and (c) none of
the Company, Evolent Health or the Company’s other subsidiaries anticipates
material capital expenditures relating to any Environmental Laws.

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(hh)            Hazardous Materials.  There has been no storage, generation,
transportation, use, handling, treatment, Release or threat of Release of
Hazardous Materials by, relating to or caused by the Company, Evolent Health or
the Company’s other subsidiaries (or, to the knowledge of the Company and
Evolent Health, any other entity (including any predecessor) for whose acts or
omissions the Company, Evolent Health or any of the Company’s other subsidiaries
is or could reasonably be expected to be liable) at, on, under or from any
property or facility now or previously owned, operated or leased by the Company,
Evolent Health or the Company’s other subsidiaries, or at, on, under or from any
other property or facility, in violation of any Environmental Laws or in a
manner or amount or to a location that could reasonably be expected to result in
any liability under any Environmental Law, except for any violation or liability
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.  “Hazardous Materials” means any material,
chemical, substance, waste, pollutant, contaminant, compound, mixture, or
constituent thereof, in any form or amount, including petroleum (including crude
oil or any fraction thereof) and petroleum products, natural gas liquids,
asbestos and asbestos-containing materials, naturally occurring radioactive
materials, brine, and drilling mud, regulated or which can give rise to
liability under any Environmental Law.  “Release” means any spilling, leaking,
seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, disposing, depositing, dispersing, or migrating in, into or
through the environment, or in, into, from or through any building or structure.

(ii)            Compliance with ERISA.  Except as would not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, (i) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for
which the Company or Evolent Health would have any liability (each, a “Plan”)
has been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited
to, ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii)
no prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any Plan other than any such
transaction effected pursuant to a statutory or administrative exemption; (iii)
for each Plan that is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA, as applicable, has been satisfied (without taking into
account any waiver thereof or extension of any amortization period) and is
reasonably expected to be satisfied in the future (without taking into account
any waiver thereof or extension of any amortization period); (iv) no “reportable
event” (within the meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur; (v) neither the Company nor Evolent Health nor any
member of their “Controlled Group” (defined as any organization which is a
member of a controlled group of corporations within the meaning of Section 414
of the Code) has incurred, nor reasonably expects to incur, any liability under
Title IV of ERISA (other than contributions to the Plan or premiums to the
Pension Benefit Guaranty Corporation (“PBGC”), in the ordinary course and
without default) in respect of a Plan (including a “multiemployer plan”, within
the meaning of Section 4001(a)(3) of ERISA); and (vi) there is no pending audit
or investigation by the Internal Revenue Service, the U.S. Department of Labor,
the PBGC or any other governmental agency or any foreign regulatory agency with
respect to any Plan.

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(jj)            Disclosure Controls.  Except as disclosed in the Time of Sale
Information and the Offering Memorandum, the Company and Evolent Health maintain
an effective system of “disclosure controls and procedures” (as defined in Rule
13a-15(e) of the Exchange Act) that complies with the requirements of the
Exchange Act and that has been designed to ensure that information required to
be disclosed by the Company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated and
communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure. The Company and its subsidiaries have
carried out evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.

(kk)            Accounting Controls.  The Company and Evolent Health maintain
systems of “internal control over financial reporting” (as defined in Rule
13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange
Act and have been designed by, or under the supervision of, their respective
principal executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including,
but not limited to, internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences and (v) interactive data in eXtensible
Business Reporting Language included or incorporated by reference in the
Offering Memorandum and the Time of Sale Information fairly presents the
information called for in all material respects and is prepared in accordance
with the Commission’s rules and guidelines applicable thereto.  Based on the
Company’s most recent evaluation of its internal controls over financial
reporting pursuant to Rule 13a-15(c), except as disclosed in the Time of Sale
Information and the Offering Memorandum, there are no material weaknesses in the
Company’s or Evolent Health’s internal controls.  The Company’s and Evolent
Health’s auditors and the Audit Committee of the Board of Directors of the
Company and of Evolent Health have been advised of: (i) all significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting which have adversely affected or are
reasonably likely to adversely affect the Company’s and/or Evolent Health’s
ability to record, process, summarize and report financial information; and (ii)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the Company’s and/or Evolent Health’s internal
controls over financial reporting.

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(ll)            eXtensible Business Reporting Language.  The interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the 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.

(mm)            Insurance.  The Company, Evolent Health and the Company’s other
subsidiaries have insurance covering their respective properties, operations,
personnel and businesses, including business interruption insurance, which
insurance is in amounts and insures against such losses and risks as are
adequate to protect the Company,  Evolent Health and the Company’s other
subsidiaries and their respective businesses; and none of the Company, Evolent
Health or any of the Company’s other subsidiaries  has (i) received notice from
any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such
insurance or (ii) any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to
continue its business.

(nn)            No Unlawful Payments.  None of the Company, Evolent Health or
the Company’s other subsidiaries, nor any director or officer of the Company,
Evolent Health or the Company’s other subsidiaries, nor, to the knowledge of the
Company or Evolent Health, any employee, agent, affiliate or other person
associated with or acting on behalf of the Company, Evolent Health, or the
Company’s other subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made or taken an act in furtherance of an offer,
promise or authorization of any direct or indirect unlawful payment or benefit
to any foreign or domestic government official or employee, including of any
government-owned or controlled entity or of a public international organization,
or any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or any applicable law or regulation
implementing the OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions, or committed an offence under
the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery
or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act
in furtherance of any unlawful bribe or other unlawful benefit, including,
without limitation, any rebate, payoff, influence payment, kickback or other
unlawful or improper payment or benefit.  The Company, Evolent Health and the
Company’s other subsidiaries, taken as a whole, have instituted, maintain and
enforce, and will continue to maintain and enforce policies and procedures
reasonably designed to promote and ensure compliance with all applicable
anti-bribery and anti-corruption laws.

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(oo)            Compliance with Anti-Money Laundering Laws.  The operations of
the Company, Evolent Health and the Company’s other subsidiaries are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements, including those of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the applicable money
laundering statutes of all jurisdictions where the Company, Evolent Health and
the Company’s other subsidiaries conduct business, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines issued,
administered or enforced by any governmental agency (collectively, the
“Anti-Money Laundering Laws”), and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving
the Company, Evolent Health or the Company’s other subsidiaries with respect to
the Anti-Money Laundering Laws is pending or, to the knowledge of the Company or
Evolent Health, threatened.

(pp)            No Conflicts with Sanctions Laws.  None of the Company, Evolent
Health or the Company’s other subsidiaries, nor any director or officer of the
Company, Evolent Health or the Company’s other subsidiaries, nor, to the
knowledge of the Company or Evolent Health, any employee, agent, affiliate or
other person associated with or acting on behalf of the Company, Evolent Health
or the Company’s other subsidiaries, is currently the subject or the target of
any sanctions administered or enforced by the U.S. government (including,
without limitation, the Office of Foreign Assets Control of the U.S. Department
of the Treasury or the U.S. Department of State and including, without
limitation, the designation as a “specially designated national” or “blocked
person”), the United Nations Security Council, the European Union, Her Majesty’s
Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor
is the Company, Evolent Health, or any of the Company’s other subsidiaries, 
located, organized or resident in a country or territory that is the subject or
target of Sanctions, including, without limitation, Cuba, Iran, North Korea,
Syria and the Crimea Region of Ukraine (each, a “Sanctioned Country”); and the
Company and Evolent Health will not directly or indirectly use the proceeds of
the offering of the Securities hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity (i) to fund or facilitate any activities of or business with any
person that, at the time of such funding or facilitation, is the subject or
target of Sanctions, (ii) to fund or facilitate any activities of or business in
any Sanctioned Country or (iii) in any other manner that will result in a
violation by any person (including any person participating in the transaction,
whether as Initial Purchaser, advisor, investor or otherwise) of Sanctions.  The
Company, Evolent Health and the Company’s other subsidiaries have not knowingly
engaged in and are not now knowingly engaged in any dealings or transactions
with any person that at the time of the dealing or transaction is or was the
subject or the target of Sanctions or with any Sanctioned Country.

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(qq)            No Restrictions on Subsidiaries.  Except as disclosed in the
Time of Sale Information and the Offering Memorandum under the caption “Certain
contractual arrangements with stockholders—Third amended and restated operating
agreement of Evolent Health LLC”, no subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other instrument to
which it is a party or is subject, from paying any dividends to the Company,
from making any other distribution on such subsidiary’s capital stock, from
repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary’s properties or assets to
the Company or any other subsidiary of the Company.

(rr)            No Broker’s Fees.  None of the Company, Evolent Health or any of
the Company’s other subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement) that would give rise
to a valid claim against the Company or Evolent Health or any Initial Purchaser
for a brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Securities.

(ss)            Rule 144A Eligibility.  On the Closing Date, the Securities will
not be of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in an automated
inter-dealer quotation system; and each of the Time of Sale Information, as of
the Time of Sale, and the Offering Memorandum, as of its date, contains or will
contain all the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.

(tt)            No Integration.  Neither the Company, nor any of its affiliates
(as defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.

(uu)            No General Solicitation. None of the Company or any of its
controlled affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no representation is made) has
solicited offers for, or offered or sold, the Securities by means of any form of
general solicitation or general advertising within the meaning of 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(a)(2) of the Securities Act.

(vv)            Securities Law Exemptions.  Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in Section
2(b) and their compliance with their agreements set forth therein, it is not
necessary, in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement, the Time of
Sale Information and the Offering Memorandum, to register the Securities under
the Securities Act or to qualify the Indenture under the Trust Indenture Act.

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(ww)            No Stabilization.  Neither the Company nor Evolent Health has
taken, directly or indirectly, any action designed to or that could reasonably
be expected to cause or result in any stabilization or manipulation of the price
of the Securities.

(xx)          Forward-Looking Statements.  No forward-looking statement (within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) included or incorporated by reference in any of the Time of Sale
Information or the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.

(yy)            Statistical and Market Data.  Nothing has come to the attention
of the Company or Evolent Health that has caused the Company or Evolent Health
to believe that the statistical and market-related data included or incorporated
by reference in each of the Time of Sale Information and the Offering Memorandum
is not based on or derived from sources that are reliable and accurate in all
material respects.

(zz)            Sarbanes-Oxley Act.  There is and has been no failure on the
part of the Company or Evolent Health or any of the Company’s or Evolent
Health’s directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act of 2002, as amended, and the rules and
regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications, that are applicable to the Company.

(aaa)            No Ratings.  There are (and prior to the Closing Date, will be)
no debt securities or preferred stock issued or guaranteed by the Company,
Evolent Health or any of the Company’s other subsidiaries that are rated by a
“nationally recognized statistical rating organization”, as such term is defined
in Section 3(a)(62) of the Exchange Act.

(bbb)            Health Care Regulations. The statements in the Time of Sale
Information and the Offering Memorandum under the captions: “Risk factors—Risks
relating to our business and industry —The health care regulatory and political
framework is uncertain and evolving” and “Risk factors—Risks relating to our
business and industry —We are subject to privacy and data protection laws
governing the transmission, security and privacy of health information, which
may impose restrictions on the manner in which we access personal data and
subject us to penalties if we are unable to fully comply with such laws” and
“Business—Health Care and Insurance Laws and Regulations”, insofar as such
statements describe the state, federal and foreign administrative healthcare
laws, rules and regulations which are applicable to the Company (the “Healthcare
Laws”), are true and correct in all material respects; and to the knowledge of
the Company or Evolent Health, there are no Healthcare Laws which as of this
date are material to the businesses of the Company, Evolent Health or the
Company’s other subsidiaries which are not described in the Time of Sale
Information or the Offering Memorandum. None of the Company, Evolent Health or
any of the Company’s other subsidiaries is in violation of any Healthcare Laws,
except for any violation that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and none have received
any written notice from any governmental or regulatory authority of potential or
actual material non-compliance by, or liability of, the Company or Evolent
Health under any Healthcare Laws.
 

 
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(ccc)            Cybersecurity, Data Privacy and Security Laws.  Except as could
not reasonably be expected to have a Material Adverse Effect or as disclosed in
the Time of Sale Information and the Offering Memorandum (i) (x) there has been
no unauthorized access to, or unauthorized use, security breach or other
compromise of, any information technology or computer systems, networks,
hardware, software, data (including the data of their respective customers,
employees, suppliers, vendors and any third party data), equipment or technology
used or held for use by or on behalf of the Company’s, Evolent Health’s or the
Company’s other subsidiaries’ (collectively, “IT Systems and Data”) and (y) such
IT Systems and Data are adequate for, and operate and perform in all material
respects as required in connection with, the operation of the business of the
Company, Evolent Health and the Company’s other subsidiaries as currently
conducted; and (ii) the Company, Evolent Health and the Company’s other
subsidiaries are, and since the Company’s, Evolent Health’s or such Company
subsidiary’s inception have been, in compliance with all applicable data privacy
and security laws and regulations, including without limitation the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”) as amended by the
Health Information Technology for Economic and Clinical Health Act (the “HITECH
Act”, and collectively, the “Privacy Laws”).  To ensure compliance with the
Privacy Laws, the Company, Evolent Health and the Company’s other subsidiaries,
taken as a whole, have in place, comply with, and take appropriate steps
reasonably designed to ensure compliance in all material respects with their
policies and procedures relating to data privacy and security and the
collection, storage, use, disclosure, handling, and analysis of Personal Data
and have implemented backup and disaster recovery technology consistent with
industry standards and practices.  “Personal Data” means (i) a natural person’s
name, street address, telephone number, e-mail address, photograph, social
security number or tax identification number, driver’s license number, passport
number, credit card number, bank information, or customer or account number;
(ii) any information which would qualify as “personally identifying information”
under the Federal Trade Commission Act, as amended; (iii) Protected Health
Information as defined by HIPAA; and (iv) any other piece of information that
allows the identification of such natural person, or his or her family, or
permits the collection or analysis of any data related to an identified person’s
health or sexual orientation.  The Company, Evolent Health and the Company’s
other subsidiaries have at all times made all disclosures to users or customers
required by applicable laws and regulatory rules or requirements, and no such
disclosures made or contained in any Policy have been inaccurate or in violation
of any applicable laws and regulatory rules or requirements, except as could not
reasonably be expected to result in a Material Adverse Effect.  None of the
Company, Evolent Health or any of the Company’s other subsidiaries:  (i) has
received notice of any actual or potential liability under or relating to, or
actual or potential violation of, any of the Privacy Laws, and has no knowledge
of any event or condition that would reasonably be expected to result in any
such notice; (ii) is currently conducting or paying for, in whole or in part,
any investigation, remediation, or other corrective action pursuant to any
Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes
any obligation or liability under any Privacy Law.

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(ddd)            Accurate Disclosure.  The statements included or incorporated
by reference in the Time of Sale Information and the Offering Memorandum from
the sections “Our company— Initial public offering, subsequent equity offerings
and organizational structure”, “Risk factors—Risks relating to our structure”,
“Risk factors—Risks relating to ownership of our Class A common stock” “Risk
factors—Risks related to the notes”, “Description of notes” and “Description of
capital stock” in the Offering Memorandum; and “Certain Relationships and
Related Party Transactions” in the Company’s Proxy Statement on Schedule 14A,
filed with the Commission on April 27, 2018, insofar as such statements
summarize legal matters, agreements, documents or proceedings discussed therein,
are accurate and fair summaries in all material respects of such legal matters,
agreements, documents or proceedings and present information required to be
shown therein pursuant to the rules and regulations of the Commission.  The
statements included in the Time of Sale Information and the Offering Memorandum
under the caption:  “Certain U.S. federal income tax considerations”, insofar as
they purport to describe provisions of U.S. federal tax laws or legal
conclusions with respect thereto, fairly and accurately summarize the matters
referred to therein in all material respects.

4.              Further Agreements of the Company and Evolent Health.  The
Company and Evolent Health jointly and severally covenant and agree with each
Initial Purchaser that:

(a)            Delivery of Copies.  The Company will deliver to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication and the Offering
Memorandum (including all amendments and supplements thereto) as the
Representatives may reasonably request.

(b)            Offering Memorandum, Amendments or Supplements.  Before
finalizing the Offering Memorandum or making or distributing any amendment or
supplement to any of the Time of Sale Information or the Offering Memorandum or
filing with the Commission any document that will be incorporated by reference
therein, the Company will furnish to the Representatives and counsel for the
Initial Purchasers a copy of the proposed Offering Memorandum or such amendment
or supplement or document to be incorporated by reference therein for review,
and will not distribute any such proposed Offering Memorandum, amendment or
supplement or file any such document with the Commission to which the
Representatives reasonably object.

(c)            Additional Written Communications.  Before using, authorizing,
approving or referring to any Issuer Written Communication, the Company will
furnish to the Representatives and counsel for the Initial Purchasers a copy of
such written communication for review and will not use, authorize, approve or
refer to any such written communication to which the Representatives reasonably
object.

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(d)            Notice to the Representatives.  The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) of the
issuance by any governmental authority of any order preventing or suspending the
use of any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum or the initiation or threatening of any proceeding for
that purpose; (ii) of the occurrence or development of any event at any time
prior to the completion of the initial offering of the Securities as a result of
which any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing when
such Time of Sale Information, Issuer Written Communication or the Offering
Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt
by the Company of any notice with respect to any suspension of the qualification
of the Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or suspending any such qualification of
the Securities and, if any such order is issued, will obtain as soon as possible
the withdrawal thereof.

(e)            Ongoing Compliance of the Offering Memorandum and Time of Sale
Information.  (1) If at any time prior to the completion of the initial offering
of the Securities (i) any event or development shall occur or condition shall
exist as a result of which the Offering Memorandum as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances existing when the Offering Memorandum is
delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Company will notify
the Initial Purchasers thereof reasonably promptly and forthwith prepare and,
subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (or including such document to be incorporated by reference
therein) will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law and (2) if at any time prior to the Closing Date
(i) any event or development shall occur or condition shall exist as a result of
which any of the Time of Sale Information as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) it is necessary
to amend or supplement any of the Time of Sale Information to comply with law,
the Company will notify the Initial Purchasers thereof reasonably promptly and
forthwith prepare and, subject to paragraph (b) above, furnish to the Initial
Purchasers such amendments or supplements to any of the Time of Sale Information
(or any document to be filed with the Commission and incorporated by reference
therein) as may be necessary so that the statements in any of the Time of Sale
Information as so amended or supplemented will not, in light of the
circumstances under which they were made, be misleading.

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(f)            Blue Sky Compliance.  The Company will use reasonable efforts to
qualify the Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions as the Representatives shall reasonably request and will
continue such qualifications in effect so long as required for distribution of
the Securities; provided that neither the Company nor Evolent Health shall be
required to (i) qualify as a foreign corporation or other entity or as a dealer
in securities in any such jurisdiction where it would not otherwise be required
to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.

(g)            Earning Statement.  The Company will make generally available to
its security holders and the Representatives as soon as practicable an earnings
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the “effective date” (as defined in Rule 158) of the Company’s
registration statement; provided that the Company will be deemed to have
furnished such reports and financial statements to the Representatives to the
extent they are filed on the Commission’s Electronic Data Gathering, Analysis,
and Retrieval system.

(h)            Clear Market.  For a period of 60 days after the date of the
offering of the Securities, each of the Company and Evolent Health will not (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, or file
with the Commission a registration statement under the Securities Act relating
to, any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock, or publicly disclose the intention to make any offer,
sale, pledge, disposition or filing, or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Stock or any such other securities, or any membership
interest in Evolent Health, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Stock or such other securities, in
cash or otherwise, without the prior written consent of J.P. Morgan Securities
LLC and Goldman Sachs & Co. LLC, other than in relation to (A) the Securities to
be sold hereunder and any Underlying Securities issued upon conversion thereof,
(B) any shares of Stock of the Company issued upon the exercise or settlement of
options granted under Company Stock Plans; provided that if the recipient of any
such shares of Stock has previously delivered a “lock-up” agreement to the
Representatives substantially in the form of Exhibit A hereto, such shares of
Stock will be subject to the terms of such lock-up, (C) the grant by the Company
of awards under Company Stock Plans as disclosed in the Time of Sale Information
and the Offering Memorandum, (D) the issuance of shares of Class B Common Stock
and Class B Common Units of Evolent Health LLC in accordance with the New
Century Merger Agreement, (E) the filing of a registration statement on Form S-8
(or equivalent form) with the Commission in connection with an employee stock
compensation plan or agreement of the Company, which plan or agreement is
disclosed in the Time of Sale Information and the Offering Memorandum, (F) the
issuance of shares of Class A Common Stock, Class B Common Stock or Class B
Common Units of Evolent Health LLC payable to the extent required pursuant to
the earnout relating to the New Century Acquisition, (G) the issuance of,
agreement to issue or public disclosure of the intent to issue, shares of Stock
or other securities (including securities convertible into shares of Stock) in
connection with the acquisition by the Company or any of its subsidiaries of the
securities, businesses, properties or other assets of another person or entity
or pursuant to any employee benefit plan assumed by the Company in connection
with any such acquisition, (H) the issuance of, agreement to issue or public
disclosure of the intent to issue, shares of Stock or other securities
(including securities convertible into shares of Stock) in connection with joint
ventures, strategic transactions or other commercial relationships (including
issuances to current or prospective customers or partners), (I) any shares of
Class A Common Stock issuable upon conversion of the Company’s $125.0 million
aggregate principal amount of 2.00% convertible senior notes due 2021 or the
Securities or (J) the issuance of shares of Class A Common Stock in connection
with any exchange of Class B common units of Evolent Health and Class B Common
Stock, provided that to the extent any such Class B common units or Class B
Common Stock are subject to a lock-up prior to such exchange, such issued Class
A Common Stock will remain subject to such lock-up; provided that, in the case
of clauses (G) and (H), the aggregate number of shares of Stock issued in all
such acquisitions and transactions shall not exceed 10.0% of the issued and
outstanding Stock of the Company on the Closing Date and any recipients of such
shares shall deliver a “lock-up” agreement to the Representatives substantially
in the form of Exhibit A hereto.

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(i)            Use of Proceeds.  The Company will apply the net proceeds from
the sale of the Securities as described in each of the Time of Sale Information
and the Offering Memorandum under the heading “Use of proceeds.”

(j)            No Stabilization.  Neither the Company nor Evolent Health will
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities and will not take any action prohibited by Regulation M under the
Exchange Act in connection with the distribution of the Securities contemplated
hereby.

(k)            Underlying Securities. The Company will reserve and keep
available at all times, free of pre-emptive rights, a number of shares of Class
A Common Stock equal to the Maximum Number of Underlying Securities.  The
Company will use its commercially reasonable best efforts to cause the
Underlying Securities to be listed and maintain the listing of such Maximum
Number of Underlying Securities on the Exchange.

(l)            Supplying Information.  While the Securities remain outstanding
and are “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, during any period in which the Company is not
subject to and in compliance with Section 13 or 15(d) of the Exchange Act,
furnish to holders of the Securities, prospective purchasers of the Securities
designated by such holders and securities analysts, in each case upon request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

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(m)            DTC.  The Company will assist the Initial Purchasers in arranging
for the Securities to be eligible for clearance and settlement through DTC.

(n)            No Resales by the Company.  The Company will not, and will not
permit any of its controlled affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities that have been acquired by any
of them, except for Securities purchased by the Company or any of its affiliates
and resold in a transaction registered under the Securities Act.

(o)            No Integration.  Neither the Company nor any of its affiliates
(as defined in Rule 501(b) of Regulation D) will, directly or through any agent,
sell, offer for sale, solicit offers to buy or otherwise negotiate in respect
of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.

(p)            No General Solicitation. None of the Company or any of its
controlled affiliates or any other person on its or their behalf (other than the
Initial Purchasers, as to which no covenant is given) will solicit offers for,
or offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D without
the prior written consent of the Representatives or in any manner involving a
public offering within the meaning of Section 4(a)(2) of the Securities Act.

(q)            Reports. For a period of two years from the date hereof, so long
as the Securities are outstanding, the Company will furnish to the
Representatives, as soon as they are available, copies of all reports or other
communications (financial or other) furnished to holders of the Securities, and
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange or automatic quotation system;
provided the Company will be deemed to have furnished such reports and financial
statements to the Representatives to the extent they are filed on the
Commission’s Electronic Data Gathering, Analysis, and Retrieval system.

5.            Certain Agreements of the Initial Purchasers.  Each Initial
Purchaser hereby represents and agrees that it has not used, authorized the use
of, referred to or participated in the planning for the use of, and will not
use, authorize the use of, refer to or participate in the planning for the use
of, any written communication that constitutes an offer to sell or the
solicitation of an offer to buy the Securities other than (i) the Preliminary
Offering Memorandum and the Offering Memorandum, (ii) a written communication
that contains no “issuer information” (as defined in Rule 433(h)(2) under the
Securities Act) that was not included (including through incorporation by
reference) in the Time of Sale Information or the Offering Memorandum, (iii) any
written communication listed on Annex A  or prepared pursuant to Section 4(c)
above (including any electronic road show (as defined below) approved in advance
by the Company) (iv) any written communication prepared by such Initial
Purchaser and approved by the Company in advance in writing or (v) any written
communication relating to or that contains the terms of the Securities and/or
other information that was included (including through incorporation by
reference) in the Time of Sale Information or the Offering Memorandum.

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6.            Conditions of Initial Purchasers’ Obligations.  The obligation of
each Initial Purchaser to purchase the Firm Securities on the Closing Date or
the Option Securities on the Additional Closing Date, as the case may be, as
provided herein is subject to the performance by the Company and Evolent Health,
jointly and severally, of their respective covenants and other obligations
hereunder and to the following additional conditions:

(a)            Representations and Warranties.  The respective representations
and warranties of the Company and Evolent Health contained herein shall be true
and correct on the date hereof and on and as of the Closing Date or the
Additional Closing Date, as the case may be; and the statements of the Company
and Evolent Health and the Company’s officers made in any certificates delivered
pursuant to this Agreement shall be true and correct on and as of the Closing
Date or the Additional Closing Date, as the case may be.

(b)            No Material Adverse Change.  No event or condition of a type
described in Section 3(j) hereof shall have occurred or shall exist, which event
or condition is not described in the Time of Sale Information (excluding any
amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) and the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.

(c)            Officer’s Certificate.  The Representatives shall have received
on and as of the Closing Date or the Additional Closing Date, as the case may
be, a certificate of the Company by the chief financial officer or chief
accounting officer of the Company and one additional senior executive officer of
the Company who is reasonably satisfactory to the Representatives (i) confirming
that such officers have carefully reviewed the Time of Sale Information and the
Offering Memorandum and, to the knowledge of such officers, the representations
of the Company and Evolent Health set forth in Sections 3(b) and 3(d) hereof are
true and correct, (ii) confirming that the other representations and warranties
of the Company and Evolent Health in this Agreement are true and correct and
that the Company and Evolent Health have complied in all material respects with
all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date or the Additional Closing
Date, as the case may be, and (iii) to the effect set forth in paragraphs (a)
and (c) above.

(d)            Comfort Letters. On the date of this Agreement and on the Closing
Date or the Additional Closing Date, as the case may be, PricewaterhouseCoopers
LLP shall have furnished to the Representatives, at the request of the Company,
letters, dated the respective dates of delivery thereof and addressed to the
Initial Purchasers, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type customarily
included in accountants’ “comfort letters” to initial purchasers with respect to
the financial statements and certain financial information contained in or
incorporated by reference in the Time of Sale Information and the Offering
Memorandum; provided, that the letter delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall use a “cut-off” date no more
than three business days prior to such Closing Date or such Additional Closing
Date, as the case may be.

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(e)            CFO Certificate. On the date of this Agreement and on the Closing
Date or the Additional Closing Date, as the case may be, the Company shall have
furnished to the Representatives a certificate, dated the respective dates of
delivery thereof and addressed to the Initial Purchasers, of its chief financial
officer with respect to certain financial data contained in the Time of Sale
Information and the Offering Memorandum, providing “management comfort” with
respect to such information, in form and substance reasonably satisfactory to
the Representatives, to the effect set forth in Annex D hereto.

(f)            Opinion and 10b-5 Statement of Counsel for the Company and
Evolent Health.  Cravath, Swaine & Moore LLP, counsel for the Company, shall
have furnished to the Representatives, at the request of the Company, their
written opinion and 10b-5 statement, dated the Closing Date or the Additional
Closing Date, as the case may be, and addressed to the Initial Purchasers, in
form and substance reasonably satisfactory to the Representatives, to the effect
set forth in Annex C hereto.

(g)            Opinion and 10b-5 Statement of Counsel for the Initial
Purchasers.  The Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, an opinion and 10b-5
statement of Davis Polk & Wardwell LLP, counsel for the Initial Purchasers, with
respect to such matters as the Representatives may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.

(h)            No Legal Impediment to Issuance and/or Sale.  No action shall
have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign governmental or
regulatory authority that would, as of the Closing Date or the Additional
Closing Date, as the case may be, prevent the issuance or sale of the
Securities; and no injunction or order of any federal, state or foreign court
shall have been issued that would, as of the Closing Date or the Additional
Closing Date, as the case may be, prevent the issuance or sale of the
Securities.

(i)            Good Standing.  The Representatives shall have received on and as
of the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and Evolent Health in
their respective jurisdictions of organization and their good standing as
foreign entities in such other jurisdictions as the Representatives may
reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such
jurisdictions.

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(j)            DTC.  The Securities shall be eligible for clearance and
settlement through DTC.

(k)            Exchange Listing.  A number of shares of Common Stock equal to
the sum of the Maximum Number of Underlying Securities shall have been approved
for listing on the Exchange, subject to official notice of issuance.

(l)            Lock-up Agreements.  The “lock-up” agreements, each substantially
in the form of Exhibit A hereto, between you and the parties listed on Schedule
2 hereto, relating to sales and certain other dispositions of shares of Stock or
certain other securities, delivered to you on or before the date hereof, shall
be in full force and effect on the Closing Date or the Additional Closing Date,
as the case may be.

(m)            Additional Documents.On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company shall have furnished to
the Representatives such further certificates and documents as the
Representatives may reasonably request.

All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

7.                   Indemnification and Contribution.

(a)            Indemnification of the Initial Purchasers by the Company and
Evolent Health.  Each of the Company and Evolent Health agrees to jointly and
severally indemnify and hold harmless each Initial Purchaser, its affiliates,
directors and officers and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, reasonable legal fees and other
reasonable expenses incurred in connection with any suit, action or proceeding
or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum, any of the other Time of Sale Information, any Issuer Written
Communication, any road show as defined in Rule 433(h) under the Securities Act
(a “road show”), or the Offering Memorandum (or any amendment or supplement
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case except
insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with  any information relating
to any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by any Initial
Purchaser consists of the information described as such in subsection (b) below.

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(b)            Indemnification of the Company and Evolent Health.  Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless the
Company and Evolent Health and their respective directors and officers and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
indemnity set forth in paragraph (a) above, but only with respect to any losses,
claims, damages or liabilities that arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to such Initial Purchaser
furnished to the Company in writing by such Initial Purchaser through the
Representatives expressly for use in the Preliminary Offering Memorandum, any of
the other Time of Sale Information (including any of the other Time of Sale
Information that has subsequently been amended), any Issuer Written
Communication, any road show or the Offering Memorandum (or any amendment or
supplement thereto) it being understood and agreed upon that the only such
information furnished by any Initial Purchaser consists of the following
information in the Offering Memorandum furnished on behalf of each Initial
Purchaser: the information contained in the twelfth and thirteenth paragraphs
under the caption “Plan of distribution.”

(c)            Notice and Procedures.  If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any person in respect of which indemnification
may be sought pursuant to the preceding paragraphs of this Section 7, such
person (the “Indemnified Person”) shall promptly notify the person against whom
such indemnification may be sought (the “Indemnifying Person”) in writing;
provided that the failure to notify the Indemnifying Person shall not relieve it
from any liability that it may have under the preceding paragraphs of this
Section 7 except to the extent that it has been materially prejudiced (through
the forfeiture of substantive rights or defenses) by such failure; and provided
further that the failure to notify the Indemnifying Person shall not relieve it
from any liability that it may have to an Indemnified Person otherwise than
under the preceding paragraphs of this Section 7.  If any such proceeding shall
be brought or asserted against an Indemnified Person and it shall have notified
the Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person (who shall not, without the
consent of the Indemnified Person, be counsel to the Indemnifying Person) to
represent the Indemnified Person in such proceeding and shall pay the reasonable
fees and expenses of such counsel related to such proceeding, as incurred.  In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.  It
is understood and agreed that the Indemnifying Person shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such fees and expenses
shall be paid or reimbursed as they are incurred.  Any such separate firm for
any Initial Purchaser, its affiliates, directors and officers and any control
persons of such Initial Purchaser shall be designated in writing by J.P. Morgan
Securities LLC and Goldman Sachs & Co. LLC, and any such separate firm for the
Company, its directors, its officers and any control persons of the Company
shall be designated in writing by the Company.  The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment.  Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for reasonable fees and expenses of counsel as contemplated
by this paragraph, the Indemnifying Person shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into in good faith more than 60 days after receipt by the Indemnifying
Person of such request and more than 30 days after receipt of the proposed terms
of such settlement and (ii) the Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement.  No Indemnifying Person shall, without the written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.

30

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(d)            Contribution.  If the indemnification provided for in paragraphs
(a) and (b) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers on
the other, from the offering of the Securities or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) but also the relative fault of the Company on the one hand, and the Initial
Purchasers on the other, in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.  The relative benefits received by the
Company, on the one hand, and the Initial Purchasers on the other, shall be
deemed to be in the same respective proportions as the net proceeds (before
deducting expenses) received by the Company from the sale of the Securities and
the total discounts and commissions received by the Initial Purchasers in
connection therewith, as provided in this Agreement, bear to the aggregate
offering price of the Securities.  The relative fault of the Company, on the one
hand, and the Initial Purchasers on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Initial Purchasers and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.

31

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(e)            Limitation on Liability.  The Company, Evolent Health and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 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 that does not take account of the equitable considerations
referred to in paragraph (d) above.  The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses incurred by
such Indemnified Person in connection with any such action or claim. 
Notwithstanding the provisions of paragraphs (d) and (e) of this Section 7, in
no event shall an Initial Purchaser be required to contribute any amount in
excess of the amount by which the total discounts and commissions received by
such Initial Purchaser with respect to the offering of the Securities exceeds
the amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  The Initial Purchasers’ obligations to contribute pursuant
to paragraphs (d) and (e) of this Section 7 are several in proportion to their
respective purchase obligations hereunder and not joint.

(f)            Non-Exclusive Remedies.The remedies provided for in this Section
7 paragraphs (a) through (e) are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Person at law or in
equity.

8.             Effectiveness of Agreement.  This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

9.            Termination.  This Agreement may be terminated in the absolute
discretion of the Representatives, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date or, in
the case of the Option Securities, prior to the Additional Closing Date (i)
trading generally shall have been suspended or materially limited on or by any
of the Exchange or The Nasdaq Stock Market; (ii) trading of any securities
issued or guaranteed by the Company shall have been suspended on any exchange or
in any over-the-counter market; (iii) a general moratorium on commercial banking
activities shall have been declared by federal or New York State authorities; or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis, either within or outside
the United States, that, in the judgment of the Representatives, is material and
adverse and makes it impracticable or inadvisable to proceed with the offering,
sale or delivery of the Securities on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated by this
Agreement, the Time of Sale Information and the Offering Memorandum.

32

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10.           Defaulting Initial Purchaser.

(a)            If, on the Closing Date or the Additional Closing Date, as the
case may be, any Initial Purchaser defaults on its obligation to purchase the
Securities that it has agreed to purchase hereunder on such date, the
non-defaulting Initial Purchasers may in their discretion arrange for the
purchase of such Securities by other persons satisfactory to the Company on the
terms contained in this Agreement.  If, within 36 hours after any such default
by any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange
for the purchase of such Securities, then the Company shall be entitled to a
further period of 36 hours within which to procure other persons satisfactory to
the non-defaulting Initial Purchasers to purchase such Securities on such
terms.  If other persons become obligated or agree to purchase the Securities of
a defaulting Initial Purchaser, either the non‑defaulting Initial Purchasers or
the Company may postpone the Closing Date or the Additional Closing Date, as the
case may be, for up to five full business days in order to effect any changes
that in the opinion of counsel for the Company or counsel for the Initial
Purchasers may be necessary in the Time of Sale Information, the Offering
Memorandum or in any other document or arrangement, and the Company agrees to
promptly prepare any amendment or supplement to the Time of Sale Information or
the Offering Memorandum that effects any such changes.  As used in this
Agreement, the term “Initial Purchaser” includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 10, purchases Securities that a
defaulting Initial Purchaser agreed but failed to purchase.

(b)            If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate number of Securities that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, does not exceed
one-eleventh of the aggregate number of Securities to be purchased on such date,
then the Company shall have the right to require each non-defaulting Initial
Purchaser to purchase the number of Securities that such Initial Purchaser
agreed to purchase hereunder on such date plus such Initial Purchaser’s pro rata
share (based on the number of Securities that such Initial Purchaser agreed to
purchase on such date) of the Securities of such defaulting Initial Purchaser or
Initial Purchasers for which such arrangements have not been made.

(c)            If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate number of Securities that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of
the aggregate principal amount of Securities to be purchased on such date, or if
the Company shall not exercise the right described in paragraph (b) above, then
this Agreement or, with respect to any Additional Closing Date, the obligation
of the Initial Purchasers to purchase Securities on the Additional Closing Date,
as the case may be, shall terminate without liability on the part of the
non-defaulting Initial Purchasers.  Any termination of this Agreement pursuant
to this Section 10 shall be without liability on the part of the Company, except
that the Company will continue to be liable for the payment of expenses as set
forth in Section 11 hereof and except that the provisions of Section 7 hereof
shall not terminate and shall remain in effect.

33

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(d)            Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company or any non-defaulting
Initial Purchaser for damages caused by its default.

11.            Payment of Expenses.

(a)            Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, except as otherwise agreed, the
Company and Evolent Health jointly and severally will pay or cause to be paid
all costs and expenses incident to the performance of their obligations
hereunder, including without limitation, (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (ii) the costs incident to the preparation
and printing the Time of Sale Information, any Issuer Written Communication and
the Offering Memorandum (including all exhibits, amendments and supplements
thereto) and the distribution thereof; (iii) the costs of reproducing and
distributing each of the Transaction Documents; (iv) the fees and expenses of
the Company and Evolent Health’s counsel and the Company’s independent
accountants; (v) the fees and expenses incurred in connection with the
registration or qualification and determination of eligibility for investment of
the Securities under the state or foreign securities or blue sky laws of such
jurisdictions as the Representatives may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Initial Purchasers up to $5,000); (vi) any fees
charged by rating agencies for rating the Securities, if any; (vii) the fees and
expenses of the Trustee and any paying agent (including related reasonable fees
and expenses of any counsel to such parties); (viii) all expenses and
application fees incurred in connection with the approval of the Securities for
book-entry transfer by DTC; (ix) all expenses incurred by the Company in
connection with any “road show” presentation to potential investors; provided,
however, that the Initial Purchasers shall be responsible for 50% of the
third-party costs of any private aircraft incurred in connection with such road
show; and (x) all expenses and application fees related to the listing of the
Underlying Securities on the Exchange.

(b)            If (i) this Agreement is terminated pursuant to Section 9 (other
than as a result of a termination pursuant to clauses (i), (iii) or (iv) of
Section 9), (ii) the Company for any reason fails to tender the Securities for
delivery to the Initial Purchasers (other than as a result of a termination
pursuant to clauses (i), (iii) or (iv) of Section 9 or Section 10) or (iii) the
Initial Purchasers decline to purchase the Securities for any reason permitted
under this Agreement, the Company and Evolent Health jointly and severally agree
to reimburse the Initial Purchasers (or, in the case of Section 10, solely the
non-defaulting Initial Purchasers) for all documented out-of-pocket costs and
expenses (including the reasonable fees and expenses of their counsel)
reasonably incurred by the Initial Purchasers in connection with this Agreement
and the offering contemplated hereby.

34

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12.                Persons Entitled to Benefit of Agreement.  This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and any controlling persons
referred to in Section 7 hereof.  Nothing in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein. 
No purchaser of Securities from any Initial Purchaser shall be deemed to be a
successor merely by reason of such purchase.

13.           Survival.  The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, Evolent Health and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, Evolent Health or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Company, Evolent Health or the Initial Purchasers.

14.          Certain Defined Terms.  For purposes of this Agreement, (a) except
where otherwise expressly provided, the term “affiliate” has the meaning set
forth in Rule 405 under the Securities Act; (b) the term “business day” means
any day other than a day on which banks are permitted or required to be closed
in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act and with respect to the Company specifically
includes Evolent Health.

15.          USA Patriot Act.  In accordance with the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)),
the Initial Purchasers are required to obtain, verify and record information
that identifies their respective clients, including the Company, which
information may include the name and address of their respective clients, as
well as other information that will allow  the Initial Purchasers to properly
identify their respective clients.

16.          Miscellaneous.

(a)            Notices.  All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
and confirmed by any standard form of telecommunication.  Notices to the Initial
Purchasers shall be given to the Representatives c/o J.P. Morgan Securities LLC,
383 Madison Avenue, New York, New York 10179 (fax:  (212) 622-8358); Attention: 
Equity Syndicate Desk; and Goldman Sachs & Co. LLC, 200 West Street, New York,
New York 10282 (fax:  (212) 902-9316); Attention:  Registration Department. 
Notices to the Company shall be given to it at 800 N. Glebe Road, Suite 500,
Arlington, Virginia 22203 (fax:  (571) 389-6001); Attention:  Jonathan Weinberg.

(b)            Governing Law.  This Agreement and any claim, controversy or
dispute arising under or related to this Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in such state.

35

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(c)            Submission to Jurisdiction. Each of the Company and Evolent
Health submits to the exclusive jurisdiction of the U.S. federal and New York
state courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Company and Evolent Health waives any objection
which it may now or hereafter have to the laying of venue of any such suit or
proceeding in such courts. Each of the Company and Evolent Health agrees that
final judgment in any such suit, action or proceeding brought in such court
shall be conclusive and binding upon the Company or Evolent Health, as
applicable, and may be enforced in any court to the jurisdiction of which the
Company or Evolent Health, as applicable, is subject by a suit upon such
judgment.

(d)            WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT.

(e)            Counterparts.  This Agreement may be signed in counterparts
(which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together
shall constitute one and the same instrument.

(f)            Amendments or Waivers.  No amendment or waiver of any provision
of this Agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.

(g)            Headings.  The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.

36

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Very truly yours,
 
EVOLENT HEALTH, INC.
 
By:
/s/ Jonathan Weinberg  
Name:  Jonathan Weinberg
 
Title:    General Counsel
   
EVOLENT HEALTH LLC
 
By:
/s/ Jonathan Weinberg  
Name:   Jonathan Weinberg
 
Title:     General Counsel

 
 
 
 
 
 
 
[Signature Page to Purchase Agreement]

--------------------------------------------------------------------------------

Accepted:  As of the date first written above

J.P. MORGAN SECURITIES LLC

For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
 
By:
/s/ Kevin Cheng  
Authorized Signatory

 
GOLDMAN SACHS & CO. LLC

For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
 
By:
/s/ Daniel Young  
Authorized Signatory

--------------------------------------------------------------------------------

Schedule 1

Initial Purchaser
 
Principal Amount
     
J.P. Morgan Securities LLC
 
 
$75,000,000
 
Goldman Sachs & Co. LLC
 
 
 75,000,000
 
           
Total
 
 
$150,000,000
 

 

 
Sch. 1-1

--------------------------------------------------------------------------------

Schedule 2

Directors

Bridget Duffy, MD
David Farner
Matthew Hobart
Diane Holder
Michael D’Amato
Norman Payson, MD
Bruce Felt
Kenneth Samet
Cheryl Scott

Section 16 Officers

Frank Williams
Seth Blackley
Nicholas McGrane
Tom Peterson
Jonathan Weinberg
Lydia Stone

Stockholders

UPMC

Sch. 2-1

--------------------------------------------------------------------------------

Schedule 3

Subsidiaries

Evolent Health LLC

Evolent Assurance Solutions, LLC

EH Holdings Company, Inc.

True Health New Mexico, Inc.

Evolent Health International Private Limited

True Health Indiana, Inc.

True Health New York, Inc.

Juntos Health Plan Inc.

NCIS Holdings, Inc.

NCIS Management Systems, Inc.

Sch. 3-1

--------------------------------------------------------------------------------

Annex A

Time of Sale Information

Term sheet containing the terms of the Securities, substantially in the form of
Annex B.

Annex A-1

--------------------------------------------------------------------------------

Annex B
 
PRICING TERM SHEET
STRICTLY CONFIDENTIAL
   
DATED OCTOBER 17, 2018
 

[image01.jpg]
 
EVOLENT HEALTH, INC.

$150,000,000

1.50% CONVERTIBLE SENIOR NOTES DUE 2025

The information in this pricing term sheet supplements Evolent Health, Inc.’s
preliminary offering memorandum, dated October 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. Evolent Health, Inc. has increased
the size of the offering to $150,000,000 (or $172,500,000 if the initial
purchasers’ option to purchase additional notes is exercised in full). The final
offering memorandum, dated October 17, 2018, relating to the offering will
reflect conforming changes relating to such increase in the size of the
offering. All references to dollar amounts are references to U.S. dollars.

 
Issuer:
Evolent Health, Inc., a Delaware corporation (the “Issuer”).
       
Ticker/Exchange for the Issuer’s Class A Common Stock:
“EVH”/The New York Stock Exchange.
       
Notes:
1.50% Convertible Senior Notes due 2025 (the “Notes”).
       
Principal Amount:
$150,000,000, plus up to an additional $22,500,000 principal amount pursuant to
the initial purchasers’ option to purchase additional Notes.
       
Denominations:
$1,000 and multiples of $1,000 in excess thereof.
       
Maturity:
October 15, 2025, unless earlier repurchased, redeemed or converted.
       
Optional Redemption:
We may not redeem the Notes prior to October 20, 2022. We may redeem for cash
all or any portion of the Notes, at our option, on or after October 20, 2022, if
the last reported sale price of our Class A common stock has been at least 130%
of the conversion price then in effect for at least 20 trading days (whether or
not consecutive) during any 30 day consecutive trading day period (including the
last trading day of such period) ending on, and including, the trading day
immediately preceding the date on which we provide notice of redemption at a
redemption price equal to 100% of the principal amount of the Notes to be
redeemed, plus accrued and unpaid interest to, but excluding, the redemption
date. No sinking fund is provided for the Notes.
 

Annex B-1

--------------------------------------------------------------------------------

   
We will give notice of any redemption not less than 50 nor more than 60
scheduled trading days before the redemption date by mail or electronic delivery
to the trustee, the paying agent (if other than the trustee) and each holder of
Notes. See “Description of notes—Optional redemption” in the Preliminary
Offering Memorandum.
       
Interest Rate:
1.50% per year
       
Interest Payment Dates:
Interest will accrue from October 22, 2018 and will be payable semiannually in
arrears on October 15 and April 15 of each year, beginning on April 15, 2019.
       
Interest Record Dates:
October 1 and April 1 of each year, immediately preceding any October 15 or
April 15 interest payment date, as the case may be.
       
Issue Price:
100% of principal, plus accrued interest, if any, from October 22, 2018.
       
Trade Date:
October 18, 2018.
       
Settlement Date:
October 22, 2018 (T+2).
       
Last Reported Sale Price of the Issuer’s Class A Common Stock on
October 17, 2018:
$25.23 per share.
       
Initial Conversion Rate:
29.9135 shares of the Issuer’s Class A common stock per $1,000 principal amount
of Notes.
       
Initial Conversion Price:
Approximately $33.43 per share of the Issuer’s Class A common stock.
       
Conversion Premium:
Approximately 32.5% above the last reported sale price of the Issuer’s Class A
common stock on October 17, 2018.
       
Settlement Method:
Cash, shares of our Class A common stock, or a combination of cash and shares of
our Class A common stock, at our election, as described under “—Conversion
rights—Settlement upon conversion” in the Preliminary Offering Memorandum.
       
Joint Book-Running Managers:
J.P. Morgan Securities LLC
Goldman Sachs & Co. LLC
       
CUSIP Number (144A):
30050BAC5
       
ISIN (144A):
US30050BAC54
       
Use of Proceeds:
The Issuer estimates that the net proceeds from the offering will be
approximately $144.8 million (or $166.6 million if the initial purchasers
exercise their option to purchase additional Notes in full), after deducting
fees and estimated expenses. The Issuer intends to loan the net proceeds from
the offering promptly to Evolent Health LLC. Evolent Health LLC will use any
such net proceeds for working capital and other general corporate purposes. See
“Use of proceeds” in the Preliminary Offering Memorandum.

Annex B-2

--------------------------------------------------------------------------------

 
Increase in Conversion Rate Upon Conversion Upon a Make-Whole Fundamental Change
or During a Redemption Period:
Following the occurrence of a “make-whole fundamental change” (as defined in the
Preliminary Offering Memorandum) or the delivery of notice of redemption, the
Issuer will increase the conversion rate for a holder who elects to convert its
Notes in connection with such make-whole fundamental change or notice of
redemption, as the case may be, in certain circumstances, as described under
“Description of notes—Conversion rights—Increase in conversion rate upon
conversion upon a make-whole fundamental change or during a redemption period”
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 or notice of
redemption for each “stock price” and “effective date” set forth below:

 
 
 

       
Stock Price
 
Effective Date
$25.23
$30.00
$33.43
$35.00
$40.00
$43.46
$50.00
$60.00
$75.00
$100.00
$125.00
October 22, 2018
9.7218
7.5403
6.2242
5.7307
4.4870
3.8418
2.9372
2.0471
1.2884
0.6777
0.3899
October 15, 2019
9.7218
7.4887
6.1248
5.6162
4.3429
3.6885
2.7803
1.9012
1.1687
0.5963
0.3348
October 15, 2020
9.7218
7.4286
6.0028
5.4748
4.1642
3.4988
2.5878
1.7252
1.0281
0.5050
0.2754
October 15, 2021
9.7218
7.2899
5.7947
5.2459
3.8997
3.2275
2.3244
1.4955
0.8543
0.3998
0.2108
October 15, 2022
9.7218
7.0216
5.4477
4.8775
3.5025
2.8327
1.9586
1.1941
0.6419
0.2832
0.1446
October 15, 2023
9.7218
6.5345
4.8674
4.2762
2.8908
2.2447
1.4440
0.8027
0.3943
0.1655
0.0845
October 15, 2024
9.7218
5.6394
3.8363
3.2254
1.8864
1.3257
0.7165
0.3291
0.1489
0.0701
0.0393
October 15, 2025
9.7218
3.4198
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 $125.00 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 $25.23 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 39.6353 shares of the Issuer’s Class A 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.

__________________

Annex B-3

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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 the shares of the Issuer’s Class A 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 the shares of the Issuer’s Class A 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.

A copy of the Preliminary Offering Memorandum for the offering of the Notes may
be obtained by contacting J.P. Morgan Securities LLC, c/o Broadridge Financial
Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone:
1-866-803-9204, or Goldman Sachs & Co. LLC, Attention: Prospectus Department,
200 West Street, New York, New York 10282; telephone: 1-866-471-2526; email:
prospectus-ny@ny.email.gs.com.

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]

Annex B-4

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Annex C

Form of Opinion of Counsel for the Company

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Annex D

EVOLENT HEALTH, INC.

CHIEF FINANCIAL OFFICER’S CERTIFICATE
 
 

 

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Exhibit A

FORM OF LOCK-UP AGREEMENT

[●], 2018

J.P. MORGAN SECURITIES LLC
GOLDMAN SACHS & CO. LLC
As Representatives of
the several Initial Purchasers listed in
Schedule 1 to the Purchase
Agreement referred to below
c/o   J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282

Re:            EVOLENT HEALTH, INC. --- Placement

Ladies and Gentlemen:

The undersigned understands that you, as Representatives of the several Initial
Purchasers, propose to enter into a purchase agreement (the “Purchase
Agreement”) with Evolent Health, Inc., a Delaware corporation (the “Company”),
and Evolent Health LLC, a Delaware limited liability company, providing for the
purchase and resale (the “Placement”) by the several Initial Purchasers named in
Schedule 1 to the Purchase Agreement (the “Initial Purchasers”), of Convertible
Notes of the Company (the “Securities”).  Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Purchase Agreement. 
References to shares of Common Stock shall be deemed to refer to shares of any
class of stock of the Company.

In consideration of the Initial Purchasers’ agreement to purchase and make the
Placement of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of J.P. Morgan Securities LLC and Goldman
Sachs & Co. LLC on behalf of the Initial Purchasers, the undersigned will not,
during the period beginning on the date of this letter agreement (the “Letter
Agreement”) and ending 45 days after the date of the offering memorandum
relating to the Placement (the “Offering Memorandum”) (such period, the
“Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock, or any securities
convertible into or exercisable or exchangeable for Common Stock (including
without limitation, LLC Units, Common Stock or such other securities which may
be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and securities
which may be issued upon exercise of a stock option or warrant), or publicly
disclose the intention to make any offer, sale, pledge or disposition, (2) enter
into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock or such other securities,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise or (3) make any demand for or exercise any right with respect to the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock, in each case other than:

Exh. A-1

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(A)  [reserved]

(B)  (i) transfers of shares of Common Stock as a bona fide gift or gifts,
(ii) transfers of shares of Common Stock or such other securities as a result of
the operation of law through estate, other testamentary document or intestate
succession or (iii) transfers of shares of Common Stock or such other securities
to any immediate family member of the undersigned or any trust for the direct or
indirect benefit of the undersigned or any immediate family member of the
undersigned (for purposes of this Letter Agreement, “immediate family” shall
mean any relationship by blood, marriage or adoption, not more remote than first
cousin);

(C)  distributions of shares of Common Stock to the members, limited or general
partners or stockholders of the undersigned, its direct or indirect affiliates
or other entities controlled or managed by the undersigned;

(D)  transfers of shares of Common Stock or other securities acquired in open
market transactions after the completion of the Placement;

(E)  [reserved];

(F)  the exercise of Stock Options to purchase shares of Common Stock and any
related transfer to the Company of shares of Common Stock (i) deemed to occur
upon the cashless exercise of such Stock Options or (ii) for the purpose of
paying the exercise price of such Stock Options or for paying taxes (including
estimated taxes) due as a result of the exercise of such Stock Options; provided
that any such purchased shares will be subject to the restrictions described in
this Letter Agreement; [or]

(G)  [transfers to the Company of shares of Common Stock or any security
convertible into or exercisable for Common Stock in connection with the
termination of service of the undersigned pursuant to agreements that provide
the Company with an option to repurchase such shares or that provide for
forfeitures in connection with such termination; or]

(H)  transfers of shares of Common Stock pursuant to a trading plan established
prior to the date hereof pursuant to Rule 10b5-1 of the Exchange Act (an
“Established Plan”); provided that (i) to the extent a filing under the Exchange
Act or public announcement, if any, is required or voluntarily made by or on
behalf of the undersigned or the Company regarding any such sales, the
undersigned shall cause such announcement or filing to include a statement to
the effect that the sale was made pursuant to an Established Plan, and (ii) the
undersigned may not amend, alter or modify an Established Plan during the
Restricted Period;

Exh. A-2

--------------------------------------------------------------------------------

provided that in the case of any transfer or distribution pursuant to clause (B)
or (C), each donee or distributee shall execute and deliver to the
Representatives a lock-up letter in the form of this Letter Agreement; and
provided, further, that in the case of any transfer or distribution pursuant to
clause (B) through (G), no filing by any party (donor, donee, transferor or
transferee) under the Securities Exchange Act of 1934, as amended, or other
public announcement shall be required or shall be made voluntarily in connection
with such transfer or distribution (other than a filing on a Form 5, Schedule
13D or Schedule 13G, in each case, in accordance with applicable law and made
after the expiration of the Restricted Period).

In addition, nothing in this Letter Agreement shall prohibit the undersigned
from (i) transferring shares of Common Stock pursuant to a liquidation, tender
offer, merger, consolidation, stock exchange or similar transaction that results
in all of the Company’s equity holders having the right to exchange their equity
securities in the Company for cash, securities or other property; provided that
if such liquidation, tender offer, merger, consolidation, stock exchange or
similar transaction is not completed, any Common Stock or other equity
securities in the Company subject to this Letter Agreement shall remain subject
to the restrictions contained in this Letter Agreement or (ii) engaging in any
transaction to the extent required by law, regulation or governmental order.

Furthermore, the undersigned may establish a written trading plan meeting the
requirements of Rule 10b5-1 under the Exchange Act; provided that no sales or
other transfers occur under such plan and no public disclosure of such plan
shall be required or shall be made by any person during the Restricted Period.

In furtherance of the foregoing, the Company, and any duly appointed transfer
agent for the registration or transfer of the securities described herein, are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Letter Agreement.

The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Letter Agreement.  All authority herein
conferred or agreed to be conferred and any obligations of the undersigned shall
be binding upon the successors, assigns, heirs or personal representatives of
the undersigned.

The undersigned understands that, if (i) prior to entering into the Purchase
Agreement, the Company notifies the Representatives in writing that the Company
does not intend to proceed with the Placement; (ii) the Purchase Agreement has
not been executed by all parties by October 30, 2018; 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, then this Letter Agreement shall immediately terminate
and the undersigned shall be released from all obligations under this Letter
Agreement.  The undersigned understands that the Initial Purchasers are entering
into the Purchase Agreement and proceeding with the Placement in reliance upon
this Letter Agreement.

Exh. A-3

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This Letter Agreement and any claim, controversy or dispute arising under or
related to this Letter Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
 
Very truly yours,
 
[NAME OF STOCKHOLDER]
 
By:
 
 
Name: 
 
Title: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[Signature Page to Purchase Agreement]