Item 1.01. Entry into a Material Definitive Agreement.
4.50% Convertible Notes due 2026
As previously disclosed, on April 13, 2021, NantHealth, Inc. (the “Company”) entered into a note purchase agreement (the “Purchase Agreement”) with NaviNet, Inc. (the “Guarantor”) and each of the investors listed on the Schedule of Buyers thereto (the “Investors”), including Nant Capital, LLC, an entity affiliated with Dr. Soon-Shiong, the Company’s Chief Executive Officer and Chairman, to issue and sell $137.5 million in aggregate principal amount of its 4.50% Convertible Senior Notes due 2026 (the “2026 Notes”) in a private placement pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) afforded by Section 4(a)(2) of the Securities Act. The 2026 Notes were issued on April 27, 2021.
Amended and Restated Promissory Notes
On April 27, 2021, in connection with the issuance of the 2026 Notes, the Company entered into a third Amended and Restated Promissory Note which amends and restates the Amended and Restated Promissory Note, dated January 4, 2016, as amended on May 9, 2016, and on December 15, 2016, between the Company and Nant Capital LLC, an affiliate of the Company, (as so amended, the “First Promissory Note”), to, among other things, extend the maturity date of the First Promissory Note to October 1, 2026 and to subordinate the First Promissory Note in right of payment to the 2026 Notes.
On April 27, 2021, in connection with the issuance of the 2026 Notes, the Company entered into a second Amended and Restated Promissory Note which amends and restates the Amended and Restated Promissory Note, dated August 8, 2018, as amended on December 31, 2020, between the Company and Nant Capital LLC, an affiliate of the Company, (as so amended, the “Second Promissory Note”, together with the First Promissory Note, the “Promissory Notes”), to, among other things, extend the maturity date of the Second Promissory Note to December 31, 2026 and to subordinate the Second Promissory Note in right of payment to the 2026 Notes.
The description of the Promissory Notes contained herein is qualified in its entirety by reference to the First Promissory Note attached as Exhibit 10.1 and the Second Promissory Note attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Registration Rights Agreement
On April 27, 2021, in connection with the issuance of the 2026 Notes, the Company and the Investors entered into a Resale Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company is obligated to, among other things, file a registration statement under the Securities Act to register the resale of all Registrable Securities (as defined in the Registration Rights Agreement).
The description of the Registration Rights Agreement contained herein is qualified in its entirety by reference to the Registration Rights Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.
Indenture
On April 27, 2021, the Company and the Guarantor entered into an indenture (the “Indenture”) by and among the Company, the Guarantor and U.S. Bank National Association, as trustee (the “Trustee”), pursuant to which the Company issued the 2026 Notes. The 2026 Notes will bear interest at a rate of 4.50% per year, payable semi-annually on April 15 and October 15 of each year, beginning on October 15, 2021. The 2026 Notes will mature on April 15, 2026, unless earlier repurchased, redeemed or converted.
The 2026 Notes are the Company’s general unsecured obligations and are initially guaranteed on a senior unsecured basis by the Guarantor.
The initial conversion rate of the 2026 Notes is 259.8753 shares of common stock per $1,000 principal amount of 2026 Notes (which is equivalent to an initial conversion price of approximately $3.85 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events in accordance with the terms of the Indenture but will not be adjusted for accrued and unpaid interest.
