TABULA RASA HEALTHCARE,INC (NASDAQ:TRHC) Files An 8-K Entry into a Material Definitive Agreement

TABULA RASA HEALTHCARE,INC (NASDAQ:TRHC) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01. Entry into a Material Definitive Agreement

On February12, 2019, Tabula Rasa HealthCare,Inc., a Delaware corporation (“TRHC”), issued and sold $325,000,000 principal amount of 1.75% Convertible Senior Subordinated Notes due 2026 (the “Notes”), including $40,000,000 principal amount of Notes issued to the option granted to the Initial Purchasers (as defined below) to purchase additional Notes solely to cover over-allotments (the “Over-Allotment Option”), which was exercised in full on February8, 2019. The Notes were issued and sold in a private placement to qualified institutional buyers to Rule144A under the Securities Act of 1933, as amended (the “Securities Act”). The terms of the Notes are governed by an indenture, dated as of February12, 2019 (the “Indenture”), between TRHC and U.S. Bank National Association, as trustee (the “Trustee”). The closing of the offering of the Notes, including the Over-Allotment Option, occurred on February12, 2019. The issuance and sale of the Notes was made to a purchase agreement, dated February7, 2019, by and among TRHC and the representatives of the initial purchasers (the “Initial Purchasers”).

The Notes will bear interest at a rate of 1.75% per year, payable semiannually in arrears on February15 and August15 of each year, beginning on August15, 2019. The Notes will mature on February15, 2026, unless earlier converted or repurchased.

The initial conversion rate for the Notes is 14.2966 shares of TRHC common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $69.95 per share of TRHC common stock). The conversion rate will be subject to adjustment upon the occurrence of certain events set forth in the Indenture but will not be adjusted for any accrued and unpaid interest. Upon conversion, TRHC will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at TRHC’s election, as set forth in the Indenture.

Holders may convert all or any portion of their Notes at their option at any time prior to the close of business on the business day immediately preceding August15, 2025, only under the following circumstances: (1)during any calendar quarter commencing after the calendar quarter ending on March31, 2019 (and only during such calendar quarter), if the last reported sale price of TRHC’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2)during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Notes for each trading day of such period was less than 98% of the product of the last reported sale price of TRHC’s common stock and the conversion rate on each such trading day; or (3)upon the occurrence of corporate events specified in the Indenture. On or after August15, 2025 until the close of business on the first scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances.

TRHC may not redeem the Notes prior to the maturity date, and no sinking fund is provided for the Notes.

If TRHC undergoes a fundamental change (as described in the Indenture), holders may require TRHC to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 50% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Payments of the fundamental change repurchase price, principal and interest that are not made when due will accrue interest per annum at the then-applicable interest rate plus one percent from the required payment date.

The Notes are senior subordinated unsecured obligations of TRHC. The Notes are:

· certain events of bankruptcy, insolvency, or reorganization of TRHC or any of its Significant Subsidiaries (as defined in the Indenture); or

· a final judgment or judgments for the payment of $15.0 million (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against TRHC or any of its subsidiaries, which judgment is not discharged, bonded, paid, waived or stayed within 60 days after (i)the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii)the date on which all rights to appeal have been extinguished.

If an Event of Default occurs and is continuing, the Trustee by notice to TRHC, or the holders of at least 25% in principal amount of the outstanding Notes by notice to TRHC 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 TRHC or a Significant Subsidiary, 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, if any, will be due and payable immediately.

A copy of the Indenture is filed as Exhibit4.1 to this Form8-K and the description of the terms of the Indenture is qualified in its entirety by reference to such exhibit. The Indenture contains the form of Note, which is filed as Exhibit4.2 to this Form8-K, and the description of the Notes is qualified in its entirety by reference to such exhibit.

In connection with the offering of the Notes, including the Over-Allotment Option, TRHC has entered into convertible note hedge transactions with affiliates of certain of the Initial Purchasers (the “option counterparties”) to the terms of call option confirmations. TRHC has also entered into warrant transactions with the option counterparties. The convertible note hedge transactions are expected generally to reduce the potential dilution to TRHC’s common stock upon conversion of the Notes and/or offset any potential cash payments TRHC is required to make in excess of the principal amount of converted Notes, as the case may be. The warrant transactions could separately have a dilutive effect on TRHC’s common stock to the extent that the market price per share of TRHC’s common stock exceeds the strike price of the warrants. The initial strike price of the warrants is approximately $105.58 per share, which represents a premium of approximately 50% over the $52.79 per share closing price of TRHC’s common stock on February7, 2019.