Document:

Exhibit 10.27

 

FORM OF UNIT PUT/CALL AGREEMENT

 

This UNIT PUT/CALL AGREEMENT (the “Agreement”) is made effective as of July 1, 2013 (the “Effective Date”) by and between Premier, Inc., a Delaware corporation, as purchaser (“Premier”), and each of the Persons listed on Schedule I hereto, as sellers (each a “Seller” and collectively, the “Sellers”).

 

WHEREAS, the Board of Directors of Premier (the “Board”) has determined to effect an underwritten initial public offering (the “IPO”) of Premier’s Class A common stock, par value $0.01 per share (the “Class A Common Stock”);

 

WHEREAS, in conjunction with the IPO, Premier Purchasing Partners, L.P., a California limited partnership (together with its successors and assigns, “Premier LP”) will undergo a reorganization (the “Reorganization”) which will include Premier LP adopting an Amended and Restated Limited Partnership Agreement, in the form approved by its general partner and a majority of its limited partners (the “LP Agreement”), pursuant to which Premier LP will (a) change its name to “Premier Healthcare Alliance, L.P.” and (b) designate Class A Common Units (“Class A Common Units”) and Class B Common Units (“Class B Common Units”) of Premier LP;

 

WHEREAS, Premier LP desires to have the option to require Premier to purchase Class A Common Units in the amount set forth opposite Premier LP’s name under the column entitled “Optioned Equity Interests” on Schedule I to this Agreement and the other Sellers desire to have the option to require Premier to purchase from the Sellers the Class B Common Units and the corresponding number of shares of Premier’s Class B common stock, $0.000001 par value per share (the “Class B Common Stock”) set forth opposite such Sellers’ names under the column entitled “Optioned Equity Interests” on Schedule I to this Agreement (collectively, the “Optioned Equity Interests”), in each case at the price and upon the terms and conditions set forth in this Agreement;

 

WHEREAS, in connection with the consummation of the Reorganization and IPO, Premier desires to have the option to require each Seller to transfer such Seller’s Optioned Equity Interests to Premier at the price and upon the terms and conditions set forth in this Agreement;

 

WHEREAS, if the Sellers elect to exercise their Put Option (as defined below) or Premier elects to exercise its Call Option (as defined below) or Additional Call Option (as defined below), Premier intends to use a portion of the proceeds received from the IPO to complete such purchase;

 

WHEREAS, Premier will contribute the Optioned Equity Interests and any Additional Class A Common Units (as defined below), as applicable, to Premier Services, LLC, a Delaware limited liability company, its wholly owned subsidiary and general partner of Premier LP (“Premier Services”), in which event any Class B Common Units contributed by Premier to Premier Services will be converted automatically into Class A Common Units pursuant to Section 3.2(a) of the LP Agreement; and

 

 

WHEREAS, the Board or a sub-committee thereof has approved the transactions contemplated by this Agreement for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 (the “Exchange Act”), which approval is intended to exempt each issuance to a Seller who may be deemed an officer or director of Premier, including a “director by deputization,” from Section 16(b) of the Exchange Act.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

 ARTICLE 1

DEFINITIONS

 

1.1          Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms shall have the meanings set forth below:

 

“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law to close.

 

“Commission” means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Group” has the meaning set forth in Section 13(d)(3) and Rule 13d-5 of the Securities Exchange Act of 1934, as amended.

 

“IPO Price” means the price paid per share for the Class A Common Stock by the underwriters to Premier in the IPO.

 

“Person” means any individual, corporation, limited liability company, partnership, trust, joint stock company, business trust, unincorporated association, joint venture, Governmental Authority or other entity or organization of any nature whatsoever or any Group of two or more of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.

 

“Underwriting Agreement” means the Underwriting Agreement to be entered into between Premier and certain underwriters providing for the purchase and sale of Premier’s Class A Common Stock in conjunction with the IPO.

 

2

 

ARTICLE 2

PUT/CALL OPTIONS

 

2.1          Seller Put Option. Each Seller shall have the option to require Premier to purchase from such Seller all but not less than all of such Seller’s Optioned Equity Interests on the terms and conditions described in this Agreement (the “Put Option”).  Each Seller may exercise such Seller’s Put Option one time on or after the Effective Date, by delivering written notice of its exercise to Premier (a “Put Option Notice”).  The obligation of Premier to purchase the Optioned Equity Interests from such Seller pursuant to the Put Option shall be subject to the following conditions:  (a) the consummation of the IPO prior to the Closing (as defined below); (b) the representations and warranties of such Seller set forth in this Agreement shall be true and correct in all material respects as of the Closing; and (c) such Seller shall have complied in all material respects with all of the covenants required to be performed by such Seller pursuant to this Agreement on or prior to the Closing.  If not previously exercised, the Put Option will expire on the earlier of March 31, 2014 or the date and time the Call Option is exercised.

 

2.2          Premier Call Option. Premier shall have the option to require each Seller to transfer all but not less than all of such Seller’s Optioned Equity Interests to Premier on the terms and conditions described in this Agreement (the “Call Option”). Premier may exercise the Call Option on or after the Effective Date, by delivering written notice of its exercise to such Seller (a “Call Option Notice”).  The obligations of such Seller to issue, sell and/or transfer, as applicable, the Optioned Equity Interests to Premier pursuant to the Call Option shall not be subject to any conditions.  If not previously exercised, the Call Option will expire on the earlier of March 31, 2014 or the date and time the Put Option is exercised.  The Call Option may not be exercised by Premier with respect to any Optioned Equity Interests with respect to which the Put Option has already been exercised by a Seller.

 

2.3          Purchase Price.  The purchase price for each Optioned Equity Interest shall be equal to the IPO Price.

 

2.4          Closing.  Subject to satisfaction or waiver of the applicable conditions precedent, the closing of the Put Option or Call Option and the transfer of the Optioned Equity Interests from the Sellers to Premier (the “Closing”) shall take place at the offices of McDermott Will & Emery LLP (“McDermott”), 340 Madison Avenue, New York, New York 10173 promptly after receipt of the Put Option Notice or Call Option Notice, or at such other time and place as may be agreed upon by Premier and the Sellers.  At the Closing, Premier shall deliver to each Seller, by wire transfer of immediately available funds to a bank account designated in writing by such Seller, an amount equal to the number of Optioned Equity Interests set forth opposite such Seller’s name in Schedule I multiplied by the IPO Price.  At the Closing, each Seller (other than Premier LP with respect to newly issued Class A Common Units) shall deliver to Premier a duly endorsed instrument of assignment with respect to the Optioned Equity Interests being sold at such Closing in substantially the form attached hereto as Exhibit A (a “Class B Common Unit Assignment Agreement”).

 

3

 

ARTICLE 3

OVER-ALLOTMENT OPTION

 

In the event that any over-allotment option granted to the underwriters of the IPO pursuant to the Underwriting Agreement is exercised in whole or in part, Premier shall have the option to require Premier LP to issue, sell and transfer additional Class A Common Units (the “Additional Class A Common Units”) to Premier in an amount equal to the number of shares of Premier’s Class A common stock being purchased by the underwriters through the exercise of such over-allotment option (the “Over-Allotment Call Option”).  Premier may exercise the Over-Allotment Call Option on or after the Effective Date, by delivering written notice of its exercise to Premier LP (an “Over-Allotment Call Option Notice”).  The obligations of Premier LP to transfer Additional Class A Common Units to Premier pursuant to the Over-Allotment Call Option shall not be subject to any conditions.  If not previously exercised, the Over-Allotment Call Option with respect to any Additional Class A Common Units will expire on the earlier of March 31, 2014 or the time and date upon which the underwriters’ over-allotment option expires.  The purchase price for each Additional Class A Common Unit shall be equal to the IPO Price.  The closing of each Over-Allotment Call Option and the transfer of the Additional Class A Common Units from Premier LP to Premier (each, an “Over-Allotment Closing”) shall take place at the offices of McDermott on or after the Effective Date promptly after receipt of the Over-Allotment Call Option Notice, or at such other time and place as may be agreed upon by Premier and Premier LP.  At the Over-Allotment Closing, Premier shall deliver to Premier LP, by wire transfer of immediately available funds to a bank account designated in writing by Premier LP, an amount equal to the number of Additional Class A Common Units being purchased multiplied by the IPO Price.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

Each Seller makes the following representations and warranties, severally with respect to itself only, for the benefit of Premier as of the date of its execution of this Agreement, the Effective Date, the Closing and, with respect to Premier LP only, the Over-Allotment Closing:

 

4.1          Representations and Warranties of Sellers.

 

(a)           Each Seller represents and warrants, severally with respect to itself only, to Premier that (i) it is duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all necessary power and authority to enter into this Agreement and to carry out the transactions contemplated by this Agreement, without the consent, waiver, approval or authorization of, or filing with, any other Person or under any applicable law, and has taken all actions necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated by this Agreement; (ii) this Agreement has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of such Seller, enforceable against it in accordance with its terms (subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles); (iii) neither the execution and delivery of this Agreement by such Seller nor the

 

4

 

consummation of the transactions contemplated herein conflicts with or results in a breach of any of the terms, conditions or provisions of the organizational documents of such Seller, any agreement or instrument to which such Seller is a party or by which the material assets of such Seller are bound, or constitutes a default under any of the foregoing, or violates any law or regulation; (iv) there are no actions, suits or proceedings pending, or, to the knowledge of such Seller, threatened against or affecting such Seller or such Seller’s assets in any court or before or by any Governmental Authority which, if adversely determined, would impair the ability of such Seller to perform its obligations under this Agreement; and (v) the performance of this Agreement will not violate any order, writ, injunction, decree or demand of any court or Governmental Authority to which such Seller is subject.

 

(b)           Each Seller represents and warrants, severally with respect to itself only, to Premier that (i) it is solvent with assets of a value that exceeds the amounts of its liabilities, (ii) it is able to meet its debts as they mature, and (iii) in its reasonable opinion, has adequate capital to conduct the businesses in which it is engaged.

 

(c)           Immediately prior to the delivery of the Optioned Equity Interests or Additional Class A Common Units, as applicable, to Premier at the Closing, each Seller represents and warrants, severally with respect to itself only, to Premier that such Seller will have good, valid and marketable title to the Optioned Equity Interests or the Additional Class A Common Units, as applicable, and has the power and authority to issue (solely in the case of Premier LP), transfer, sell, assign and convey to Premier such Optioned Equity Interests or Additional Class A Common Units, as applicable, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind, other than pursuant to this Agreement.

 

(d)           Each Seller represents and warrants, severally with respect to itself only, to Premier that no agent, broker, investment banker, financial advisor or other person or entity is or will be entitled, by reason of any agreement, act or statement by it or any of its representatives to any financial advisory, broker’s, finder’s or similar fee or commission, to reimbursement of expenses or to indemnification or contribution in connection with the transactions contemplated hereby.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF PREMIER

 

Premier makes the following representations and warranties for the benefit of each Seller as of the date of its execution of this Agreement, the Effective Date, the Closing and the Over-Allotment Closing:

 

5.1          Representations and Warranties of Premier.

 

(a)           Premier represents that it is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has all necessary power and authority to enter into this Agreement and to carry out the transactions contemplated by this Agreement, without the consent, waiver, approval or authorization of, or filing with, any other Person or

 

5

 

under any applicable law, and has taken all actions necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated by this Agreement.

 

(b)           Premier represents that this Agreement has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of Premier enforceable in accordance with the terms hereof (subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles).

 

(c)           Premier represents that neither the execution and delivery of this Agreement by Premier nor the consummation of the transactions contemplated herein (i) conflicts with or results in a breach of any of the terms, conditions or provisions of the organizational documents of Premier or any agreement or instrument to which Premier is a party or by which the material assets of Premier are bound or (ii) constitutes a default under any of the foregoing, or violates any law or regulation, except to the extent that any conflict, breach or default under this subsection (c) would not prevent or materially hinder the performance of the actions contemplated by this Agreement.

 

(d)           Premier represents that there are no actions, suits or proceedings pending or, to the knowledge of Premier, threatened against or affecting Premier or assets of Premier in any court or before or by any Governmental Authority which, if adversely determined, would impair the ability of Premier to perform Premier’s obligations under this Agreement.

 

(e)           Premier represents that its performance of this Agreement will not violate any order, writ, injunction, decree or demand of any court or Governmental Authority to which Premier is subject.

 

(f)            All Optioned Equity Interests and Additional Class A Common Units acquired by Premier will be acquired solely for Premier’s own account for investment purposes only and not with a present view toward the distribution thereof or with any present intention of distributing or reselling any such Optioned Equity Interests or Additional Class A Common Units in violation of the Securities Act or any state securities laws.  Irrespective of any other provisions of this Agreement, any sale of any of the Optioned Equity Interests or Additional Class A Common Units acquired by Premier will be made only in compliance with all applicable federal and state securities laws, including the Securities Act.

 

(g)           Premier is aware of the need to conduct its own investigation of the Optioned Equity Interests and Additional Class A Common Units and has had the opportunity to ask questions and receive answers concerning the Optioned Equity Interests and Additional Class A Common Units acquired by Premier.  Premier has had full access to such information and materials concerning Premier LP and its subsidiaries as Premier has requested.  Sellers have answered all inquiries that Premier has made to Sellers relating to Premier LP and its subsidiaries or the Optioned Equity Interests and Additional Class A Common Units.

 

(h)           Premier is able to fend for itself in the transactions contemplated by this Agreement and has such knowledge and experience in financial and business matters such that

 

6

 

Premier is capable of evaluating the merits and risks of an investment in the Optioned Equity Interests and Additional Class A Common Units and of making an informed investment decision with respect thereto, or has consulted with advisors who possess such knowledge and experience.

 

(i)            Premier is able to bear the economic risk of its investment in the Optioned Equity Interests and Additional Class A Common Units for an indefinite period of time.  Premier understands that the Optioned Equity Interests and Additional Class A Common Units have not been registered under the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or unless an exemption from such registration is available.

 

(j)            Sellers are relying upon the truth and accuracy of the representations, warranties and acknowledgements of Premier and Premier agrees that if any of the representations, warranties and acknowledgements deemed to have been made by Premier by its execution of this Agreement are no longer accurate, it shall promptly notify Sellers.  Premier consents to such reliance.

 

ARTICLE 6

TERMINATION

 

This Agreement shall automatically terminate and be of no further force and effect (a) with respect to the Optioned Equity Interests, in the event that neither the Put Option nor the Call Option has been exercised as set forth in Sections 2.1 or 2.2 on or prior to March 31, 2014; and (b) with respect to any Additional Class A Common Units, in the event that the Over-Allotment Call Option applicable to such Additional Class A Common Units has been exercised as set forth in Article 3 on or prior to March 31, 2014.

 

ARTICLE 7

MISCELLANEOUS

 

7.1          Notices.  Any written notice required or permitted to be delivered pursuant to this Agreement shall be in writing and shall be deemed delivered (i) upon delivery if delivered in person, (ii) upon transmission if sent by facsimile, with receipt confirmed by the recipient thereof, (iii) one Business Day after deposit with a nationally recognized overnight courier service; provided, that confirmation of such overnight delivery is received by the sender thereof or (iv) upon transmission if sent by e-mail, with receipt confirmed by the recipient thereof. Notices to Premier or any Seller shall be delivered to the respective addresses as set forth below:

 

	
If to Premier, to:
    	
Premier, Inc.
    
	
 
    	
13034 Ballantyne   Corporate Place

Charlotte, NC 28277

Attention: Chief   Financial Officer and General Counsel

Facsimile: (704)   816-6307

Email:   craig_mckasson@premierinc.com and

Jeffrey_Lemkin2@premierinc.com,   respectively
    

 

7

 

	
If to any Seller:
    	
The address indicated   below the name of such Seller on Schedule I hereto.
    

 

Any party hereto may change its address for notices by giving written notice of such party’s new address to the other parties hereto in accordance with this Section 7.1.

 

7.2          Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. No Person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement. No party hereto may assign its rights under this Agreement without the prior written consent of the other party hereto.

 

7.3          Amendment and Waiver.

 

(a)           No failure or delay on the part of any Seller or Premier in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Sellers or Premier at law, in equity or otherwise.

 

(b)           Any amendment, supplement or modification of or to any provision of this Agreement and any waiver of any provision of this Agreement shall be effective only if it is made or given in writing and signed by the Sellers and Premier.

 

7.4          Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, all of which when so executed shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.

 

7.5          Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

7.6          Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without regard to the conflicts of laws principles thereof that would mandate the application of the laws of another jurisdiction.

 

7.7          Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

 

8

 

 

7.8          Entire Agreement. This Agreement, together with the schedules hereto are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

7.9          Further Assurances. Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.

 

[Remainder of page intentionally left blank]

 

9

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the dates set forth below.

 

 

	
 
    	
 
    	
 
    	
PREMIER, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By:     
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
Craig McKasson
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
SELLERS: 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
PREMIER PURCHASING PARTNERS,   L.P.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By: 
    	
Premier Plans, LLC,  its general partner 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:     
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
Craig McKasson
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
PREMIER   HEALTHCARE SOLUTIONS, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
[                                                  ]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
 
    	
Name:  
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
						

 

10

 

Schedule I

 

	
Name and Address of Seller
    	
 
    	
Optioned 
    Equity 
    Interests
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

 

EXHIBIT A

 

FORM OF CLASS B COMMON UNIT ASSIGNMENT AGREEMENT

 

This ASSIGNMENT AGREEMENT (this “Agreement”), and is made by and among the undersigned seller (the “Seller”), Premier, Inc., a Delaware corporation (“Premier”) and Premier Healthcare Alliance, L.P., a California limited partnership (together with its successors and assigns, “Premier LP”). Each capitalized term used herein without definition shall have the meaning assigned to it in the Unit Put/Call Agreement (as defined below). This Agreement is effective as of the Closing.

 

RECITALS

 

WHEREAS, Premier, the Seller and the other sellers named therein have entered into a Unit Put/Call Agreement (the “Unit Put/Call Agreement”), pursuant to which the Seller agreed to sell, assign, convey and transfer Class B Common Units to Premier; and

 

WHEREAS, Premier has agreed to purchase such Class B Common Units from Seller pursuant to the Unit Put/Call Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the Unit Put/Call Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

 

1.             Transfer.  Seller hereby sells, assigns, conveys and transfers to Premier at the Closing the number of Class B Common Units set forth below its signature on the signature pages hereto.

 

2.             Acknowledgement of Sale by Premier LP. Premier LP hereby acknowledges the sale, assignment, conveyance and transfer by Seller to Premier at the Closing of the number of Class B Common Units set forth under Seller’s signature hereto and shall update Exhibit 3.1 to the LP Agreement to reflect the sale and transfer of Class B Common Units as contemplated in the Unit Put/Call Agreement and herein.

 

3.             Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without regard to the conflicts of laws principles thereof that would mandate the application of the laws of another jurisdiction.

 

4.             Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

5.             Further Assurances. Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.

 

6.             Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, all of which when so executed shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.

 

 

[remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the dates set forth below.

 

	
 
    	
 
    	
 
    	
PREMIER, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
 
    	
Name:  
    	
Craig McKasson
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
PREMIER HEALTHCARE ALLIANCE,   L.P.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By:  
    	
Premier Services,   LLC, its general partner
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
 
    	
Name:  
    	
Craig McKasson
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
[                                      ]
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
 
    	
Name:  
    	
 
    
	
 
    	
 
    	
 
    	
Title:Exhibit 10.28

 

FORM OF CONTRIBUTION AGREEMENT

 

This CONTRIBUTION AGREEMENT (this “Agreement”) is effective immediately prior to the closing of the initial public offering of a newly formed Delaware corporation named “Premier, Inc.” (the “Public Company”) (the “Effective Date”), and is made by and between                              (“Stockholder”) and Premier Purchasing Partners, L.P. (“Premier LP”), with respect to the shares of common stock of Premier, Inc., an existing Delaware corporation (“Premier, Inc.”), owned by Stockholder.  Premier, Inc. and Premier LP are collectively referred to in this Agreement as “Premier.”

 

RECITALS

 

WHEREAS, Stockholder owns the number of shares of common stock of Premier, Inc. set forth opposite its name in Schedule A (the “Premier, Inc. Common Stock”);

 

WHEREAS, in conjunction with the proposed reorganization of Premier and its affiliates (the “Reorganization”) and the initial public offering of Class A shares of the common stock of the Public Company, Premier LP will adopt an Amended and Restated Limited Partnership Agreement, in the form approved by its general partner and a majority of its limited partners (the “LP Agreement”), pursuant to which Premier LP will (a) change its name to “Premier Healthcare Alliance, L.P.” and (b) issue Class A Common Units to its general partner and Class B Common Units to its limited partners, collectively representing a 100% interest in Premier LP; and

 

WHEREAS, Stockholder desires to contribute all of its Premier, Inc. Common Stock to Premier LP in exchange for Class B Common Units of Premier LP (the “Premier LP Class B Common Units”), upon the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and of the representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

ARTICLE 1
 CONTRIBUTION

 

SECTION 1.1                        Contribution: Closing.

 

(a)                                 Upon the terms and subject to the conditions contained herein, and in reliance on the representations, warranties, covenants, terms and conditions of this Agreement, Stockholder hereby contributes to Premier LP, and Premier LP hereby accepts, the Premier, Inc. Common Stock (the “Contribution”) and in consideration therefor Premier LP hereby issues to Stockholder, and Stockholder hereby accepts, the number of Premier LP Class B Common Units determined as set forth in Section 1.2 below.  The Contribution made and accepted hereunder shall be free from all pledges, liens, security interests, charges, claims, equities or encumbrances of any kind and from all rights exercisable by or claims by third parties and together with all 

 

 

rights attached or accruing to them.  The parties shall treat the Contribution as a tax-free transaction for applicable tax purposes.

 

(b)                                 Subject to the approval by the general partner and the majority of the limited partners of Premier LP of the Reorganization and the adoption of the LP Agreement, the Contribution shall be effective immediately prior to the closing of the initial public offering of the Public Company (the “Effective Date”) without any further action on the part of Stockholder.

 

SECTION 1.2                        Exchange Formula.  The number of Premier LP Class B Common Units to be issued to each Stockholder in consideration of the Contribution, when added to the Class B Common Units issued to such Stockholder based upon such Stockholder’s Premier LP capital account balance prior to giving effect to the Contribution, shall be equal to the total number of Premier LP Class B Common Units outstanding immediately following the Reorganization multiplied by Stockholder’s Percentage Interest in the Premier LP Class B Common Units as calculated by Premier LP.  For purposes of this Agreement, the term “Percentage Interest” means (a) the independently appraised fair market value of Premier, Inc. prior to giving effect to the Reorganization multiplied by Stockholder’s percentage interest in the total issued and outstanding common stock of Premier, Inc. as of the Effective Date (but prior to the Reorganization) plus (b) the independently appraised fair market value of Premier LP prior to giving effect to the Reorganization multiplied by Stockholder’s percentage interest in the aggregate capital accounts of all partners as of the Effective Date (but prior to the Reorganization), divided by (c) the sum of the independently appraised fair market value of Premier, Inc. and the independently appraised fair market value of Premier LP, in each case prior to giving effect to the Reorganization.  An illustrative calculation is set forth on Annex I attached hereto.

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

 

SECTION 2.1                        Representations and Warranties of Stockholder.

 

(a)                                 Stockholder represents and warrants to Premier LP, as of the date hereof, and as of the Effective Date that (i) Stockholder is duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all necessary power and authority to enter into this Agreement and to carry out the transactions contemplated by this Agreement, without the consent, waiver, approval or authorization of, or filing with, any other person, entity or governmental authority or under any applicable law, and has taken all actions necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated by this Agreement, (ii) this Agreement has been duly executed and delivered by Stockholder and constitutes the legal, valid and binding obligation of Stockholder, enforceable against Stockholder in accordance with its terms (subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles); (iii) neither the execution and delivery of this Agreement by Stockholder nor the consummation of the transactions contemplated herein (including the Reorganization) conflicts with or results in a breach of any of the terms, conditions or provisions of the organizational documents of Stockholder, any agreement or instrument to which Stockholder is a party or by which the material assets of Stockholder are bound, or constitutes a default under any of the 

 

2

 

foregoing; (iv) there are no actions, suits or proceedings pending, or, to the knowledge of Stockholder, threatened against or affecting Stockholder or Stockholder’s assets in any court or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality which, if adversely determined, would impair the ability of Stockholder to perform Stockholder’s obligations under this Agreement; and (v) the performance of this Agreement will not violate any order, writ, injunction, decree or demand of any court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality to which Stockholder is subject.

 

(b)                                 Stockholder (i) is solvent with assets of a value that exceeds the amounts of its liabilities, (ii) is able to meet its debts as they mature, and (iii) in its reasonable opinion, has adequate capital to conduct the businesses in which it is engaged.

 

(c)                                  Stockholder represents and warrants to Premier LP, as of the Effective Date, that (i) Stockholder has good, valid and marketable title to the Premier, Inc. Common Stock to be contributed to Premier LP pursuant to Article 1 hereof and has the power and authority to transfer, sell, assign and convey to Premier LP such Premier, Inc. Common Stock, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind, other than pursuant to this Agreement, and (ii) the number of shares of Premier, Inc. Common Stock set forth on Schedule A hereto constitutes all of the Premier, Inc. Common Stock owned by Stockholder.

 

(d)                                 All Premier LP Class B Common Units acquired by or for Stockholder are and will be acquired solely for Stockholder’s own account for investment purposes only and not with a present view toward the distribution thereof or with any present intention of distributing or reselling any such Premier LP Class B Common Units in violation of the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws.  Irrespective of any other provisions of this Agreement, any sale of any of the Premier LP Class B Common Units acquired by Stockholder will be made only in compliance with all applicable federal and state securities laws, including the Securities Act.

 

(e)                                  Stockholder is aware of the need to conduct its own investigation of the Premier LP Class B Common Units and has had the opportunity to ask questions and receive answers concerning the Premier LP Class B Common Units acquired by or for Stockholder.  Stockholder has had full access to such information and materials concerning Premier LP and its subsidiaries as Stockholder has requested. Premier LP has answered all inquiries that Stockholder has made to Premier LP relating to Premier LP and its subsidiaries or the Premier LP Class B Common Units acquired by such Stockholder.

 

(f)                                   Stockholder is able to fend for itself in the transactions contemplated by this Agreement and has such knowledge and experience in financial and business matters such that Stockholder is capable of evaluating the merits and risks of an investment in the Premier LP Class B Common Units and of making an informed investment decision with respect thereto, or has consulted with advisors who possess such knowledge and experience.

 

(g)                                  Stockholder is able to bear the economic risk of its investment in the Premier LP Class B Common Units for an indefinite period of time.  Stockholder understands that the Premier LP Class B Common Units have not been registered under the Securities Act 

 

3

 

and therefore cannot be sold unless subsequently registered under the Securities Act or  unless an exemption from such registration is available.

 

(h)                                 Premier LP is relying upon the truth and accuracy of the representations, warranties and acknowledgements of Stockholder and Stockholder agrees that if any of the representations, warranties and acknowledgements deemed to have been made by Stockholder by its execution of this Agreement are no longer accurate, it shall promptly notify Premier LP. Stockholder consents to such reliance.

 

(i)                                     An investment in the Premier LP Class B Common Units involves risk. Stockholder acknowledges and agrees that Stockholder has reviewed and considered the risks and uncertainties described in the Private Placement Memorandum and Information Statement Regarding Reorganization of Premier, Inc. and Premier Purchasing Partners, L.P. and Request for Execution of Consent, Power of Attorney and Reorganization Documents attached hereto and incorporated herein by reference and made a part hereof before making an investment decision with respect to the Premier LP Class B Common Units. The risk factors described therein are not the only ones that Premier LP faces or that may relate to an investment in the Premier LP Class B Common Units.  Any of these risks, alone or in combination with other risks, could result in a material and adverse impact upon the business, financial condition, results of operations, plans or prospects of Premier LP.  In such case, the value of the Premier LP Class B Common Units could decline, and Stockholder could lose part or all of its investment in Premier LP.

 

SECTION 2.2                        Representations and Warranties of Premier LP.

 

(a)                                 Premier LP represents that it is a limited partnership duly organized, validly existing and in good standing under the laws of California and has all necessary power and authority to enter into this Agreement and to carry out the transactions contemplated by this Agreement, without the consent, waiver, approval or authorization of, or filing with, any other person, entity or governmental authority or under any applicable law, and has taken all actions necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated by this Agreement.

 

(b)                                 Premier LP represents that this Agreement has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of Premier LP enforceable in accordance with the terms hereof (subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles).

 

(c)                                  Premier LP represents, as of the Effective Date, that (i) the Premier LP Class B Common Units have been duly authorized and validly issued by Premier LP, (ii) no limited partner of Premier LP has any preemptive or other subscription right to acquire any limited partnership interests of Premier LP and (iii) Premier LP shall convey to Stockholder good and valid title to the Premier LP Class B Common Units, in the amount determined in accordance with Section 1.2 above, free and clear of any liens, claims, security interests and encumbrances.

 

(d)                                 Premier LP represents that neither the execution and delivery of this Agreement by Premier LP nor the consummation of the transactions contemplated herein,

 

4

 

including the Reorganization, (i) conflicts with or results in a breach of any of the terms, conditions or provisions of the organizational documents of Premier LP or any agreement or instrument to which Premier LP is a party or by which the material assets of Premier LP are bound or (ii) constitutes a default under any of the foregoing, except to the extent that any conflict, breach or default under this subsection (d) would not prevent or materially hinder the performance of the actions contemplated by this Agreement.

 

(e)                                  Premier LP represents that there are no actions, suits or proceedings pending or, to the knowledge of Premier LP, threatened against or affecting Premier LP or assets of Premier LP in any court or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality which, if adversely determined, would impair the ability of Premier LP to perform Premier LP’s obligations under this Agreement.

 

(f)                                   Premier LP represents that its performance of this Agreement will not violate any order, writ, injunction, decree or demand of any court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality to which Premier LP is subject.

 

ARTICLE 3
 MISCELLANEOUS

 

SECTION 3.1                        Entire Agreement.  This Agreement shall constitute the entire agreement among the parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

 

SECTION 3.2                        Amendment, Modification or Waiver.  This Agreement may be amended, modified, waived or supplemented, in whole or in part, as to any party hereto by a written agreement signed by each party hereto.  No failure or delay on the part of any party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.  The waiver by such parties of any breach of this Agreement shall not be construed as a waiver of any subsequent breach.

 

SECTION 3.3                        Successors and Assigns. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns, but neither this Agreement nor any of the rights, interests and obligations hereunder shall be assigned or otherwise transferred, in whole or in part, by any party without the prior written consent of each of the parties.

 

SECTION 3.4                        Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

SECTION 3.5                        Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California (other than the laws regarding choice of laws 

 

5

 

and conflicts of laws that would apply the substantive laws of any other jurisdiction) as to all matters, including matters of validity, construction, effect, performance and remedies.

 

SECTION 3.6                        Interpretation.  The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.

 

SECTION 3.7                        Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.

 

SECTION 3.8                        Void Date.  If the Effective Date does not occur prior to March 31, 2014, this Agreement shall be null and void and of no further force or effect.

 

[Signature page follows]

 

6

 

IN WITNESS WHEREOF, the undersigned have executed this Contribution Agreement as of the dates set forth below.

 

	
 
    	
STOCKHOLDER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:                                , 2013
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PREMIER   PURCHASING PARTNERS, L.P.
    
	
 
    	
 
    	
 
    
	
Date:                                , 2013
    	
By:
    	
Premier   Plans, LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   
    	
Craig   McKasson
    
	
 
    	
 
    	
Title:   
    	
Chief   Financial Officer
    

 

7

 

Schedule A

 

	
Holder
    	
 
    	
Number of Shares
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

 

Annex I

 

Examples of Calculation of Premier LP Class B Common Units

to be Issued to Stockholder After Giving Effect to the Contribution

 

	
Owner Percentage Interest Formula
    	
 
    	
 
    	
 
    	
Example
   Owner
   #1
    	
 
    	
Example
   Owner
   #2
    	
 
    	
Example
   Owner
   #3
    	
 
    
	
Example: Fair Market Value of Premier LP 
    	
 
    	
a
    	
 
    	
$3,240M
    	
 
    
	
Example: Fair Market Value of Premier, Inc.
    	
 
    	
b
    	
 
    	
$360M
    	
 
    
	
Example: Combined Fair Market Value 
    	
 
    	
c
    	
 
    	
$3,600M
    	
 
    
	
Owner Interest in Premier LP
    	
 
    	
d
    	
 
    	
1.00
    	
%
    	
1.00
    	
%
    	
1.00
    	
%
    
	
Owner Interest in Premier, Inc.
    	
 
    	
e
    	
 
    	
0.50
    	
%
    	
1.00
    	
%
    	
1.50
    	
%
    
	
Owner Combined Interest in Premier LP
    	
 
    	
(a*d + b*e)/c
    	
 
    	
0.95
    	
%
    	
1.00
    	
%
    	
1.05
    	
%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]