Item 1.01 Entry into a Material Definitive Agreement.
On November 23, 2021, Hanger, Inc. (the "Company") entered into a Second
Amendment to Credit Agreement (the "Second Amendment") among the Company, the
subsidiary guarantors party thereto, the revolving lenders party thereto and
Bank of America, N.A., as agent (the "Agent"), which amends the Credit
Agreement, dated as of March 6, 2018, among the Company, the lenders from time
to time party thereto and the Agent (as amended by the First Amendment to Credit
Agreement dated as of May 4, 2020, the "Existing Credit Agreement"; the Existing
Credit Agreement as amended by the Second Amendment, the "Credit Agreement").
The Second Amendment revises certain provisions of the Existing Credit Agreement
to, among other things, (i) increase the aggregate amount of the revolving loan
commitments by $35 million to an aggregate total amount of $135 million,
(ii) extend the scheduled maturity date of the revolving loan facility to
November 23, 2026 (subject to a springing maturity if the term loans outstanding
under the Existing Credit Agreement are not repaid prior to the date that is 91
days prior to the stated maturity thereof), (iii) decrease the applicable margin
on LIBOR and base rate revolving loan borrowings by 0.75% per annum,
(iv) decrease the LIBOR interest rate floor in respect of revolving loan
borrowings to 0.00% per annum, (v) decrease the revolving loan facility
commitment fee to 0.30% per annum, (vi) increase the maximum allowable leverage
ratio for covenant purposes such that the maximum consolidated first lien net
leverage ratio shall be up to (a) 5.00 to 1.00 for the fiscal quarters ending
December 31, 2021, March 31, 2022, June 30, 2022 and September 30, 2022 and
(b) 4.75 to 1.00 for the fiscal quarter ending December 31, 2022 and the last
day of each fiscal quarter thereafter, and (vii) permit, at the Company's
election and up to three times during the term of the Credit Agreement, the
maximum allowable leverage ratio for covenant purposes to be temporarily
increased by an additional 0.50 to 1.00 for four consecutive fiscal quarters in
connection with certain material acquisitions.
The foregoing description of the Second Amendment does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Second Amendment, which is filed as Exhibit 10.1 to this Current Report on Form
8-K and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
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