NantHealth, Inc. (NASDAQ:NH) Files An 8-K Entry into a Material Definitive Agreement

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NantHealth, Inc. (NASDAQ:NH) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

Entry into a Material Definitive Agreement.

Purchase Agreement

On December15, 2016, NantHealth, Inc. (the Company) entered into
a purchase agreement (the Purchase Agreement) with J.P. Morgan
Securities LLC and Jefferies LLC, as representatives of the
several initial purchasers named therein (collectively, the
Initial Purchasers), to issue and sell $90million in aggregate
principal amount of its 5.50% Convertible Senior Notes due 2021
(the Notes) in a private placement to qualified institutional
buyers to Rule 144A under the Securities Act of 1933, as amended
(the Securities Act) and to non-U.S. persons to Regulation
S under the Securities Act. The Notes will be issued to the
Initial Purchasers to an exemption from the registration
requirements of the Securities Act afforded by Section 4(a)(2) of
the Securities Act. In addition, the Company granted the Initial
Purchasers a 13-day option to purchase up to an additional
$15million aggregate principal amount of the Notes.

The Purchase
Agreement includes customary representations, warranties and
covenants by the Company and customary closing conditions. Under
the terms of the Purchase Agreement, the Company has agreed to
indemnify the Initial Purchasers against certain
liabilities.

The description of
the Purchase Agreement contained herein is qualified in its
entirety by reference to the Purchase Agreement attached as
Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated herein by reference.

Cambridge Purchase
Agreement

On December15,
2016, the Company entered into a purchase agreement (the
Cambridge Purchase Agreement) with Cambridge Equities, L.P., an
entity affiliated with Dr.Patrick Soon-Shiong, the Companys
Chairman and Chief Executive Officer (Cambridge), to issue and
sell $10million in aggregate principal amount of the Notes in a
private placement to an exemption from the registration
requirements of the Securities Act afforded by Section 4(a)(2) of
the Securities Act.

The Cambridge
Purchase Agreement includes customary representations, warranties
and covenants by the Company and customary closing
conditions.

The description of
the Cambridge Purchase Agreement contained herein is qualified in
its entirety by reference to the Cambridge Purchase Agreement
attached as Exhibit 10.2 to this Current Report on Form 8-K and
is incorporated herein by reference.

Amended
and Restated Promissory Note

On December15,
2016, in connection with the offering of the Notes, the Company
entered into a Second Amended and Restated Promissory Note which
amends and restates the Amended and Restated Promissory Note,
dated May9, 2016, between the Company and Nant Capital LLC, an
affiliate of the Company, (as so amended, the Promissory Note),
to, among other things, extend the maturity date of the
Promissory Note and to subordinate the Promissory Note in right
of payment to the Notes.

The description of
the Promissory Note contained herein is qualified in its entirety
by reference to the Promissory Note attached as Exhibit 10.3 to
this Current Report on Form 8-K and is incorporated herein by
reference.

Indenture

On December21,
2016, the Company entered into an Indenture, relating to the
issuance of the Notes (the Indenture), by and between the Company
and U.S. Bank National Association, as trustee (the Trustee). The
Notes will bear interest at a rate of 5.50% per year, payable
semi-annually on June15 and December15 of each year, beginning on
June15, 2017. The Notes will mature on December15, 2021, unless
earlier repurchased by the Company or converted to their
terms.

The initial
conversion rate of the Notes is 82.3893 shares of common stock
per $1,000 principal amount of Notes (which is equivalent to an
initial conversion price of approximately $12.14 per share). The
conversion rate will be subject to adjustment upon the occurrence
of certain specified events but will not be adjusted for accrued
and unpaid interest. In addition, upon the occurrence of a
make-whole fundamental change (as defined in the Indenture), the
Company will, in certain circumstances, increase the conversion
rate by a number of additional shares for a holder that elects to
convert its Notes in connection with such make-whole fundamental
change.

On or after the
date that is one year after the last date of original issuance of
the notes, if the last reported sale price of the Companys common
stock for at least 20 trading days (whether or not consecutive)
during the period of 30 consecutive trading days ending within
the five trading days immediately preceding a conversion date is
greater than or equal to 120% of the conversion price on each
applicable trading day, the Company will make an interest
make-whole payment to a converting holder (other than a
conversion in connection with a make-whole fundamental change in
which the conversion rate is adjusted) equal to the sum of the
present values of the scheduled payments of interest that would
have been made on the Notes to be converted had such Notes
remained outstanding from the conversion date through the earlier
of (i)the date that is three years after the conversion date and
(ii)the maturity date if the notes had not been so converted. The
present values of the remaining interest payments will be
computed using a discount rate equal to 2.0%. The Company may pay
any interest make-whole payment either in cash or in shares of
its common stock, at the Companys election as described in the
Indenture.

Prior to the close
of business on the business day immediately preceding
September15, 2021, the Notes will be convertible only under the
following circumstances: (1)during any calendar quarter
commencing after March31, 2017 (and only during such calendar
quarter), if, for at least 20 trading days (whether or not
consecutive) during the 30 consecutive trading day period ending
on the last trading day of the immediately preceding calendar
quarter, the last reported sale price of the Companys common
stock on such trading day is greater than or equal to 120% of the
conversion price on such trading day; (2)during the five business
day period after any five consecutive trading day period in
which, for each day of that period, the trading price per $1,000
principal amount of the Notes for such trading day was less than
98% of the product of the last reported sale price of the
Companys common stock and the conversion rate on such trading
day; or (3)upon the occurrence of specified corporate
transactions. On or after September15, 2021, until the close of
business on the business day immediately preceding the maturity
date, holders of the Notes may convert all or a portion of their
Notes, in multiples of $1,000 principal amount, at any time. Upon
conversion, the Notes will be settled in cash, shares of the
Companys common stock or any combination thereof at the Companys
option.

The Company may
not redeem the Notes prior to the maturity date and no sinking
fund is provided. Upon the occurrence of a fundamental change (as
defined in the Indenture), holders may require the Company to
purchase all or a portion of the Notes in principal amounts of
$1,000 or an integral multiple thereof, for cash at a price equal
to 50% of the principal amount of the Notes to be purchased plus
any accrued and unpaid interest to, but excluding, the
fundamental change purchase date.

The Notes are the
Companys general unsecured obligations and will rank equal in
right of payment with all of the Companys existing and future
liabilities that are not expressly subordinated to the Notes;
effectively rank junior in right of payment to any of its secured
indebtedness to the extent of the value of the assets securing
such indebtedness; and are structurally subordinated to all
indebtedness and other liabilities (including trade payables) of
subsidiaries of the Company.

For so long as at
least $25million principal amount of the Notes are outstanding,
the Indenture restricts the Company or any of its subsidiaries
from creating, assuming or incurring any indebtedness owing to
any of the Companys affiliates (other than intercompany
indebtedness between the Company and its subsidiaries and other
than any Notes held by the Companys affiliates), or prepaying any
such indebtedness, subject to certain exceptions, unless certain
conditions described in the Indenture have been satisfied.

The following
events are considered events of default with respect to the
Notes, which may result in the acceleration of the relevant
maturity of such series of Notes:

(1) the Company defaults in any payment of interest on the Notes
when due and payable and the default continues for a period
of 30 days;
(2) the Company defaults in the payment of principal on the Notes
when due and payable at the stated maturity, upon any
required repurchase, upon declaration of acceleration or
otherwise;
(3) failure by the Company to comply with its obligation to
convert the Notes in accordance with the Indenture upon
exercise of a holders conversion right, including the payment
of any interest make-whole payment, and such failure
continues for a period of five business days;
(4) failure by the Company to give a fundamental change notice or
notice of a specified corporate transaction when due with
respect to the Notes;
(5) failure by the Company to comply with its obligations under
the Indenture with respect to consolidation, merger and sale
of assets of the Company;
(6) failure by the Company to comply with any of its other
agreements contained in the Notes or the Indenture, for a
period 60 days after written notice from the Trustee or the
holders of at least 25% in principal amount of the Notes then
outstanding has been received;
(7) default by the Company or any of its significant subsidiaries
(as defined in the Indenture) with respect to any mortgage,
agreement or other instrument under which there may be
outstanding, or by which there may be secured or evidenced,
any indebtedness for money borrowed in excess of $17.5million
(or its foreign currency equivalent) in the aggregate of the
Company and/or any such subsidiary, whether such indebtedness
now exists or shall hereafter be created (i)resulting in such
indebtedness becoming or being declared due and payable or
(ii)constituting a failure to pay the principal of any such
indebtedness when due and payable at its stated maturity,
upon required repurchase, upon declaration of acceleration or
otherwise, and, in the case of clauses (i)and (ii), such
default is not rescinded or annulled or such failure to pay
or default shall not have been cured or waived, such
acceleration is not rescinded or such indebtedness is not
discharged, as the case may be, within 30 days after notice
to the Company by the Trustee or to the Company and the
Trustee by holders of at least 25% in aggregate principal
amount of Notes then outstanding in accordance with the
Indenture; or
(8) certain events of bankruptcy, insolvency, or reorganization
of the Company or any of its significant subsidiaries (as
defined in the Indenture).

If such an event
of default, other than an event of default described in clause
(8)above with respect to the Company, occurs and is continuing,
the Trustee by notice to the Company, or the holders of at least
25% in principal amount of the outstanding Notes by notice to the
Company and the Trustee, may, and the Trustee at the request of
such holders shall, declare 50% of the principal of and accrued
and unpaid interest, if any, on all the Notes to be due and
payable. In case of certain events of bankruptcy, insolvency or
reorganization involving the Company, 50% of the principal of and
accrued and unpaid interest on the Notes will automatically
become due and payable. Upon such a declaration of acceleration,
such principal and accrued and unpaid interest on the Notes, if
any, will be due and payable immediately.

The summary of the
foregoing transactions is qualified in its entirety by reference
to the text of the Indenture and the Form of Global 5.50%
Convertible Senior Notes due 2021, which are filed as Exhibit 4.1
and 4.2, respectively, hereto and are incorporated herein by
reference.

Item3.02. Unregistered Sales of Equity Securities.

The information
set forth in Item 1.01 above is incorporated by reference into
this Item 3.02.

Item8.01. Other Events.

On December15,
2016, the Company issued a press release announcing the launch of
its offering of the Notes. A copy of this press release is filed
herewith as Exhibit 99.1 and is incorporated herein by
reference.

On December16,
2016, the Company issued a press release announcing the pricing
of its offering of the Notes. A copy of this press release is
filed herewith as Exhibit 99.2 and is incorporated herein by
reference.

Item9.01. Financial Statements and Exhibits.

(d)
Exhibits

Exhibit No.

Description

4.1 Indenture, dated December21, 2016, between NantHealth, Inc.
and U.S. Bank National Association.
4.2 Form of 5.50% Convertible Senior Note due 2021 (included in
Exhibit 4.1).
10.1 Purchase Agreement, dated December15, 2016, by and among
NantHealth, Inc. and J.P. Morgan Securities LLC and Jefferies
LLC, as representative of the initial purchasers named
therein.
10.2 Purchase Agreement, dated December15, 2016, by and between
NantHealth, Inc. and Cambridge Equities, L.P..
10.3 Second Amended and Restated Promissory Note, dated
December15, 2016, by and between NantHealth, Inc. and Nant
Capital LLC.
99.1 Press Release, dated December15, 2016, announcing launch of
the Notes.
99.2 Press Release, dated December16, 2016, announcing pricing of
the Notes.


About NantHealth, Inc. (NASDAQ:NH)

NantHealth, Inc. is a healthcare cloud-based information technology (IT) company. The Company is engaged in converging science and technology through a single integrated clinical platform, to provide actionable health information at the point of care. The Company offers the Genomic Proteomic Spectrometry (GPS) Cancer test, a molecular test and decision support solution that measures the proteins present in the patient’s tumor tissue, combined with whole genomic and transcriptomic sequencing of tumor and normal samples. The Company also offers Nant Operating System (NantOS) and NantOS applications to healthcare providers and payors, self-insured employers and biopharmaceutical companies. It offers CLINICS, an integrated solution that includes GPS Cancer, NantOS and the NantOS applications. The CLINICS solution includes System Infrastructure, Knowledge Platform, Provider Platform and Payor Platform.

NantHealth, Inc. (NASDAQ:NH) Recent Trading Information

NantHealth, Inc. (NASDAQ:NH) closed its last trading session up +0.55 at 11.69 with 208,578 shares trading hands.