ATI Physical Therapy Inc.
12/17/2024 | Press release | Distributed by Public on 12/17/2024 07:01
Amendments to Bylaws Form 8 K
| Item 1.01 |
Entry into a Material Definitive Agreement
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(a) Third Amendment to Note Purchase Agreement
On April 17, 2023, ATI Physical Therapy, Inc. (the "Company") entered into a Note Purchase Agreement, by and among the Company, Wilco Holdco, Inc. ("Wilco"), Wilco Intermediate Holdings, Inc. ("Holdings"), ATI Holdings Acquisition, Inc. ("Opco"), the purchasers from time to time party thereto (the "Purchasers") and Wilmington Savings Fund Society, FSB, as purchaser representative (the "Purchaser Representative") (as amended by that certain First Amendment to Note Purchase Agreement, dated as of June 15, 2023 and Second Amendment to Note Purchase Agreement, dated as of October 2, 2024, the "Original Note Purchase Agreement"), pursuant to which the Company issued to certain Purchasers (a) second lien PIK convertible notes in an aggregate principal amount of $103,243,302.02 and (b) second lien delayed draw PIK notes in an aggregate principal amount of $41,500,000.00.
On December 12, 2024 (the "Amendment Closing Date"), the Company, Wilco, Holdings, Opco, the subsidiary guarantors party thereto, the Purchasers party thereto and the other purchasers party thereto (in such capacity, the "Third Amendment Purchasers") and the Purchaser Representative, entered into the Third Amendment to Note Purchase Agreement (the "Note Purchase Agreement Amendment," and together with the Original Note Purchase Agreement, the "Note Purchase Agreement"), pursuant to which, among other things, the Company agreed to issue to the Third Amendment Purchasers new second lien PIK notes in the aggregate principal amount of up to $6,000,000 (the "Third Amendment Notes").
Pursuant to the terms of the Escrow Agreement, dated as of December 12, 2024 (the "Escrow Agreement"), each Third Amendment Purchaser will fund into escrow an amount up to such Third Amendment Purchaser's Third Amendment Notes commitment to be held in escrow until the satisfaction or waiver of the Tender Offer Conditions (as defined in the Escrow Agreement) and the agreement by the Company or its applicable affiliate to accept the Shares (as defined in the Escrow Agreement) (collectively, the "Escrow Release Conditions"). If the Escrow Release Conditions are not satisfied, the deposited funds held in escrow will be returned to each Third Amendment Purchaser and the Company will pay each Third Amendment Purchaser a termination fee equal to the amount of accrued interest that would otherwise have been payable on the Third Amendment Notes on such date.
If issued, the Third Amendment Notes will mature on August 24, 2028 and will bear interest (x) for the period commencing on the Pre-Funding Date (as defined in the Note Purchase Agreement) and ending on the date that is 180 days after the Pre-Funding Date, at a rate per annum equal to 12% and (y) for the period commencing after the date that is 180 days after the Pre-Funding Date, at a rate per annum equal to 17%, payable quarterly in-kind in the form of additional Third Amendment Notes by capitalizing the amount of such interest on the outstanding principal balance of the Third Amendment Notes in arrears on each interest payment date. The Third Amendment Notes are not convertible into the Company's Common Stock.
(b) Amendment No. 3 to Credit Agreement
On April 24, 2022, the Company entered into a Credit Agreement, by and among Holdings, Opco, the lenders from time to time party thereto (the "Lenders"), HPS Investment Partners, LLC, as lender representative (the "Lender Representative") and Barclays Bank plc, as administrative agent (the "Administrative Agent") (as amended by Amendment No. 1 to Credit Agreement, dated as of March 30, 2022, Amendment No. 2 to Credit Agreement, dated as of April 17, 2023 and Consent Agreement to Amendment No. 2 to Credit Agreement, dated as of June 15, 2023, the "Original Credit Agreement"), pursuant to which the Lenders extended to Opco (a) senior secured term loans in an aggregate principal amount of $500,000,000.00 and (b) revolving credit commitments in an aggregate amount of $50,000,000.00.
On the Amendment Closing Date, the Company, Wilco, Holdings, Opco, the subsidiary guarantors party thereto, the Lenders party thereto, the Lender Representative and the Administrative Agent, entered into the Amendment No. 3 to the Credit Agreement and Amendment No. 1 to Parent Loan Guaranty (the "Credit Agreement Amendment" and together with the Original Credit Agreement, the "Credit Agreement"), pursuant to which the Lenders party thereto and the Company agreed to make certain amendments to the Credit Agreement to allow for, among other things, entry into the Escrow Agreement and Note Purchase Agreement Amendment and to allow for the issuance of a tender offer statement and the transactions contemplated thereby.
(c) First Certificate of Amendment to First A&R Certificate of Designation
On February 23, 2022, the Company adopted that certain Certificate of Designation of Series A Senior Preferred Stock of the Company filed in the office of the Secretary of State of Delaware on February 24, 2022 (the "Certificate of Designation"), for purposes of issuing shares of preferred stock, with a par value of $0.0001 per share, designated as a series known as "Series A Senior Preferred Stock," with each such share having voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, and the qualification, limitations and restrictions, as set forth in the Certificate of Designation. On April 16, 2023, the Company adopted that certain First Amended and Restated Certificate of Designation of Series A Senior Preferred Stock of the Issuer filed in the office of the Secretary of State of Delaware on June 15, 2023 (the "First A&R Certificate of Designation").
On the Amendment Closing Date, the amendments to the First A&R Certificate of Designation set forth in that certain First Certificate of Amendment to First A&R Certificate of Designation (the "Certificate of Designation Amendment") were adopted. The Certificate of Designation Amendment, among other things, allows for the issuance of a tender offer statement and the transactions contemplated thereby.
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The foregoing descriptions of the Certificate of Designation Amendment, Note Purchase Agreement Amendment, Third Amendment Notes, Escrow Agreement, and Credit Agreement Amendment do not purport to be complete and are qualified in their entirety by reference to the Certificate of Designation Amendment, Note Purchase Agreement Amendment, Form of Third Amendment Notes, Escrow Agreement and Credit Agreement Amendment, which are filed as Exhibits 3.1, 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K and incorporated herein by reference.