EVOLENT HEALTH, INC. : Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Material Modification to Rights of Security Holders, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Financial Statements and Exhibits (form 8-K)

Item 1.01. Entry into a Material Definitive Agreement

On January 20, 2023 (the "Closing Date"), Evolent Health, Inc. (the "Company") consummated the transactions (the "Closing") contemplated by the previously announced Stock and Asset Purchase Agreement (the "Magellan Purchase Agreement"), dated November 17, 2022, by and among the Company, Evolent Health LLC ("EVH LLC"), Magellan Health, Inc. ("Magellan Parent"), and Magellan Healthcare, Inc.

Amendment No. 1 to Credit Agreement

In connection with the Closing, on the Closing Date, the Company entered into Amendment No. 1 ("Amendment No. 1") to the Credit Agreement, dated as of August 1, 2022, by and between the Lenders party thereto, EVH LLC, as the Administrative Borrower, the other borrowers party thereto, the Company, as the Parent, each other Guarantor party thereto, Ares Capital Corporation ("Ares"), as Administrative Agent, and ACF Finco I LP, as Collateral Agent and Revolving Agent (the "Existing Credit Agreement"; the Existing Credit Agreement, as amended by Amendment No. 1, the "Credit Agreement") that provided new secured debt financing in the form of (i) additional commitments under the Company's existing asset-based revolving credit facility in an aggregate principal amount equal to $25.0 million (the "Priority ABL Incremental Facility"), and (ii) additional commitments under the Company's existing term loan facility in an aggregate principal amount equal to $240.0 million (the "Term Loan Incremental Facility" and together with the Priority ABL Incremental Facility, the "Acquisition Facilities"), and effected certain amendments to the Existing Credit Agreement. On the Closing Date, EVH LLC borrowed $25.0 million under the Priority ABL Incremental Facility and $240.0 million under the Term Loan Incremental Facility to finance, together with the proceeds from the sale of the Series A Preferred Stock (as defined below), the cash consideration payable at Closing and pay transaction fees and expenses.

All loans under the Credit Agreement (including loans under the Acquisition Facilities and loans outstanding under the Existing Credit Agreement) (collectively, the "Loans") will mature on the date that is the earliest of (a) the sixth anniversary of the Closing Date, (b) the date on which the commitments are voluntarily terminated pursuant to the terms of the Credit Agreement, (c) the date on which all amounts outstanding under the Credit Agreement have been declared or have automatically become due and payable under the terms of the Credit Agreement and (d) the date that is ninety-one (91) days prior to the maturity date of any Junior Debt (as defined in the Existing Credit Agreement) unless certain liquidity conditions are satisfied.

The interest rate for all Loans will be calculated, at the option of the borrowers, (a) in the case of a term loan, at either the Adjusted Term SOFR Rate (as defined in the Credit Agreement) plus 6.00%, or the base rate plus 5.00% and (b) in the case of a revolving loan, at either the Adjusted Term SOFR Rate plus 4.00%, or the base rate plus 3.00%. EVH LLC paid closing fees equal to 3.00% of the aggregate commitments provided in respect of the Acquisition Facilities.

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Amounts outstanding under the Credit Agreement may be prepaid at the option of the Company subject to applicable premiums and a call protection premium payable on the amount prepaid in certain instances as follows: (1) 3.00% of the principal amount so prepaid after the Closing Date but prior to the first anniversary of the Closing Date; (2) 2.00% of the principal amount so prepaid after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date; (3) 1.00% of the principal amount so prepaid after the second anniversary of the Closing Date but prior to the third anniversary of the Closing Date; and (4) 0.00% of the principal amount so prepaid on or after the third anniversary of the Closing Date.

Loans under the Acquisition Facilities are subject to the same security and guarantee arrangements and affirmative and negative covenants, mandatory . . .

Item 2.01. Completion of Acquisition or Disposition of Assets

Pursuant to the terms of the Magellan Purchase Agreement and at Closing, EVH LLC acquired all of the issued and outstanding shares of capital stock of National Imaging Associates, Inc. as well as certain assets held by Magellan Parent and/or certain of its subsidiaries that were used in the Magellan Specialty Health Division. At Closing, EVH LLC paid cash consideration to Magellan Parent and certain of its affiliates of approximately $386.7 million (which is subject to certain post-Closing adjustments) and issued 8,474,576 shares of the Company's Class A Common Stock ("Magellan Class A Shares") to Magellan Parent. As described in Item 1.01 and incorporated by reference herein, pursuant to Amendment No. 1 and the Securities Purchase Agreement, Ares and certain of its affiliates, and certain of its and their managed funds and accounts some of whom are currently lenders and agents under our Existing Credit Agreement, have provided funds used in the acquisition.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an

           Off-Balance Sheet Arrangement of a Registrant

The description of Amendment No. 1 in Item 1.01 of this Form 8-K is incorporated by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities

Pursuant to the Magellan Purchase Agreement, 8,474,576 shares of the Company's Class A Common Stock were issued at Closing to Magellan Parent. The issuance and sale of the Magellan Class A Shares to Magellan Parent was exempt from registration under the Securities Act of 1933, as amended (the "Securities Act") by Section 4(a)(2) thereof as a transaction not involving any public offering. The Company did not engage in a general solicitation or advertising with regard to the issuance and sale of the Magellan Class A Shares that were issued in connection with the Closing.

The offer and sale of the shares of Series A Preferred Stock through the Securities Purchase Agreement described above was made in reliance on an exemption from registration under the Securities Act, pursuant to Section 4(a)(2) thereof. The shares of Class A Common Stock issuable upon conversion of shares of the Series A Preferred Stock will be issued in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act. The information in Item 1.01 above relating to the issuance and sale of the Series A Preferred Stock is incorporated into this Item 3.02 by reference.

Item 3.03 Material Modification to Rights of Security Holders

Pursuant to the Securities Purchase Agreement, the Company issued 175,000 shares of Series A Preferred Stock to the Purchasers. A summary of the rights, preferences and privileges of the Series A Preferred Stock is set forth in Item 1.01 above, which is incorporated herein by reference. Each share of Series A Preferred Stock issued to the Purchasers pursuant to the Securities Purchase Agreement has the powers, designations, preferences, and other rights of the Series A Preferred Stock as are set forth in the Certificate of Designation of the Series A Preferred Stock filed by the Company with the Delaware Secretary of State on January 19, 2023 (the "Certificate of Designation"), a copy of which is filed as Exhibit 3.1 hereto and is incorporated herein by reference.

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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal

Year

The information set forth in Item 1.01 and Item 3.03 above relating to the issuance and sale of the Series A Preferred Stock and the Certificate of Designation is incorporated herein by reference. The Certificate of Designation establishes the powers, designations, preferences, and other rights of the Series A Preferred Stock and became effective upon filing with the Secretary of State of the State of Delaware on January 19, 2023.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Business Acquired.

Combined audited financial statements of Magellan Specialty Health, a business of Magellan Parent ("Magellan"), comprised of the combined balance sheets as of December 31, 2020 and 2021, the related combined statements of operations, cash flows and equity for each of the years in the two-year period ended December 31, 2021 and the related notes to the combined financial statements, are attached hereto as Exhibit 99.1.

Combined unaudited financial statements of Magellan, comprised of the condensed combined balance sheets as of September 30, 2022 and December 31, 2021, the related condensed combined statements of operations, cash flows and equity for the nine months ended September 30, 2022 and 2021 and the related notes to the condensed combined financial statements, are attached hereto as Exhibit 99.2.

(b) Pro Forma Financial Information.

The unaudited pro forma combined financial information of the Company as of September 30, 2022, for the year ended December 31, 2021 and for the nine months ended September 30, 2022, giving effect to the Closing, are attached hereto as Exhibit 99.3.

(d) Exhibits.

Exhibit
  No.                                     Description

 3.1           Certificate of Designation of Series A Convertible Preferred Stock
             of Evolent Health, Inc., dated as of January 19, 2023

10.1           Amendment No. 1, dated as of January 20, 2023, to the Credit
             Agreement, dated as of August 1, 2022, by the Lenders party thereto,
             EVH LLC, as the Administrative Borrower, the other borrowers party
             thereto, the Company, as the Parent, each other Guarantor party
             thereto, Ares Capital Corporation, as Administrative Agent, and ACF
             Finco I LP, as Collateral Agent and Revolving Agent

10.2           Securities Purchase Agreement, dated as of January 20, 2023, by and
             among the Purchasers listed on Schedule I thereto and Evolent Health,
             Inc.

10.3           Investors Rights Agreement, dated as of January 20, 2023, by and
             among the Purchasers listed on Schedule I thereto and Evolent Health,
             Inc.

10.4           Registration Rights Agreement, dated as of January 20, 2023, by and
             among the Stockholders named in Schedule I thereto and Evolent
             Health, Inc.

10.5           Registration Rights Agreement, dated as of January 20, 2023, by and
             between Magellan Parent and Evolent Health, Inc.

10.6           Lock Up Agreement, dated as of January 20, 2023, by and between
             Magellan Parent and Evolent Health, Inc.

23.1           Consent of KPMG LLP, independent auditors for Magellan.

99.1           Combined audited financial statements of Magellan as of
             December 31, 2021 and 2020 and for the two years ended December 31,
             2021.

99.2           Combined unaudited financial statements of Magellan as of
             September 30, 2022 and December 31, 2021 and for the nine months
             ended September 30, 2022 and 2021.

99.3           Unaudited pro forma condensed combined financial information of
             Evolent Health, Inc. as of and for the nine months ended
             September 30, 2022 and 2021 and for the year ended December 31, 2021.


104          Cover Page Interactive Data File (embedded within the Inline XBRL
             document).

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