Item 1.01 Entry Into a Material Definitive Agreement
On August 27, 2021, Privia Health Group, Inc. (the "Company") and certain of its
subsidiaries entered into an assumption agreement and third amendment (the
"Third Amendment") to the credit agreement, dated as of November 15, 2019 (the
"Original Credit Agreement"), by and among Privia Health, LLC, as the borrower,
PH Group Holdings Corp., as a guarantor, certain subsidiaries of Privia Health,
LLC, as guarantors, Silicon Valley Bank, as administrative agent and collateral
agent (the "Administrative Agent"), and the several lenders from time to time
party thereto, as amended by the first amendment on July 17, 2020 and the second
amendment March 8, 2021 (as amended by the Third Amendment, the "Credit
Agreement"). The Original Credit Agreement consisted of a term loan facility
(the "Term Loan Facility") in the aggregate principal amount of $35.0 million,
and a revolving loan facility (the "Revolving Loan Facility" and, together with
the Term Loan Facility, the "Credit Facilities") in an aggregate principal
amount of up to $10.0 million (which was increased to $15.0 million in
connection with the first amendment) including a letter of credit sub-facility
in the aggregate availability amount of $2.0 million and a swingline
sub-facility in the aggregate availability amount of $2.0 million.
Pursuant to the Third Amendment, the Company became the parent guarantor under
the Credit Agreement and granted Silicon Valley Bank, as the Administrative
Agent, a first-priority security interest on substantially all of its real and
personal property, subject to permitted liens. The Third Amendment increased the
size of the Revolving Loan Facility to $65.0 million, increased the letter of
credit sub-facility to $5.0 million and extended the maturity date of the Credit
Facilities to August 27, 2026. As amended, borrowings under the Credit
Facilities bear interest at a rate equal to (i) in the case of eurodollar loans,
LIBOR plus an applicable margin, subject to a 0.5% floor, and (ii) in the case
of ABR loans, an ABR rate plus an applicable margin, subject to a floor of 1.5%.
In addition, the Amendment, among other things, (i) changed the Term Loan
Facility amortization schedule to 0.625% of the original principal amount of
term loans for the fiscal quarters ending September 30, 2021 through and
including June 30, 2024 and 1.25% of the original principal amount of term loans
for the fiscal quarters ending thereafter and (ii) added a 1.0% prepayment
premium for any term loans prepaid within six months of the effective date of
the Third Amendment. The Amendment converted the financial covenants in the
Original Credit Agreement to "springing" financial covenants, so that at any
time the Company's cash is less than 125% of the outstanding borrowings under
the Credit Facilities, or at least $15.0 million of borrowings are outstanding
under the Revolving Loan Facility, the Company will be required to maintain (i)
a consolidated fixed charge coverage ratio of not less than 1.20 to 1.0, and
(ii) a consolidated leverage ratio of no more than 3.5 to 1.0 for the fiscal
quarters ending September 30, 2021 and December 31, 2021 and 3.0 to 1.0 for each
fiscal quarter ending thereafter. As of June 30, 2021, the Company had total
outstanding debt of $33.7 million in principal amount under the Term Loan
Facility.
A copy of the Third Amendment, including a conformed copy of the Credit
Agreement reflecting all changes through the Third Amendment attached as Exhibit
B thereto, is filed as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated by reference into this Item 1.01. The foregoing summaries of the
Third Amendment and the Credit Agreement are qualified in their entirety by
reference to the text of the Third Amendment and the Credit Agreement filed
herewith.
Item 2.03 Creation of Direct Financial Obligation or an Obligation Under an
Off-Balance sheet Arrangement of Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is
incorporated in this Item 2.03 by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibit:
Exhibit No. Description
Assumption Agreement and Third Amendment to the Credit Agreement, dated
August 27, 2021, by and among Privia Health Group, Inc., as parent
guarantor, Privia Health, LLC, as the borrower, certain other subsidiaries
10.1 of Privia Health Group, Inc., as guarantors, Silicon Valley Bank, as
administrative agent and collateral agent, and the several lenders from
time to time party thereto (including conformed copy of the Credit
Agreement attached as Exhibit B thereto).
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