ZAGG INC (NASDAQ:ZAGG) Files An 8-K Entry into a Material Definitive AgreementItem 9.01
On July 17, 2017, ZAGG Inc (the “Company”), KeyBank National Association (“KeyBank”), ZB, N.A. dba Zions First National Bank (“Zions Bank”), and JPMorgan Chase Bank, N.A. (collectively, the “Lenders”), and KeyBank, as the administrative agent for the Lenders, entered into a Third Amendment Agreement (“Amendment”), which amends the original Credit and Security Agreement dated as of March 3, 2016 by and among the Company, KeyBank, KeyBanc Capital Markets Inc., Zions Bank, and the other lenders party thereto, as amended by that certain First Amendment Agreement dated as of May 31, 2016 and that certain Second Amendment Agreement dated as of March 8, 2017 (collectively, the “Credit Agreement”), to:
| ● | Increase the Maximum Revolving Amount, as defined in the Credit Agreement, from $85.0 million to: |
| ○ | $135.0 million from July 17, 2017 to December 31, 2017; |
| ○ | $110.0 million from January 1, 2018 to May 31, 2018; and |
| ○ | $100.0 million from June 1, 2018 forward. |
| ● | Expand Permitted Foreign Subsidiary Loans, Guaranties and Investments, as defined in the Credit Agreement, to include: |
| ○ | A $2.0 million loan dated April 5, 2017 from the Company to ZAGG International Distribution Limited; and |
| ○ | Any other loan or investment by the Company or any domestic subsidiary of the Company in or to, or guaranty of indebtedness of, any foreign subsidiary of the Company for the period July 17, 2017 to March 31, 2018, in an aggregate amount not to exceed $8.0 million. |
| ● | Increase the Letter of Credit Commitment, as defined in the Credit Agreement, from $7.5 million to an aggregate amount of $40.0 million. |
| ● | Increase the Borrowing Base, as defined in the Credit Agreement, on a seasonal basis between August 1, 2017 and September 30, 2017 by $15.0 million. |
In connection with the Amendment, the Company also entered into replacement revolving credit notes with each of the Lenders. As consideration for entering into the Amendment, the Company agreed to pay the administrative agent and Lenders total amendment and arrangement fees of $145.0 thousand, to the terms of an administrative agent fee letter and a closing fee letter entered into with KeyBank. The changes to the Credit Agreement described above were made to support core-business opportunities.
The foregoing summary is qualified in its entirety by reference to the Amendment and other loan documents attached hereto as Exhibits 10.1-10.6, and incorporated herein by reference.
| Item 9.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant |
The discussion of the Amendment set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) |
Exhibits. |
| The following are filed as Exhibits to this Current Report on Form 8-K. |
|
Exhibit No. |
Description |
|
| 10.1 | Third Amendment Agreement, dated July 17, 2017, by and among ZAGG Inc, KeyBank National Association, ZB, N.A. dba Zions First National Bank and JP Morgan Chase Bank, N.A. | |
| 10.2 | $49,090,909.08 Revolving Credit Note, dated July 17, 2017, by ZAGG Inc to KeyBank National Association | |
| 10.3 | $42,954,545.46 Revolving Credit Note, dated July 17, 2017, by ZAGG Inc to ZB, N.A. dba Zions First National Bank | |
| 10.4 | $42,954,545.46 Revolving Credit Note, dated July 17, 2017, by ZAGG Inc to JPMorgan Chase Bank, N.A. | |
| 10.5 | Third Amendment Administrative Agent Fee Letter, dated July 17, 2017, between ZAGG Inc and KeyBank National Association | |
| 10.6 | Third Amendment Closing Fee Letter, dated July 17, 2017, between ZAGG Inc and KeyBank National Association |
ZAGG Inc ExhibitEX-10.1 2 f8k071717ex10i_zagginc.htm THIRD AMENDMENT AGREEMENT,…To view the full exhibit click here
About ZAGG INC (NASDAQ:ZAGG)
ZAGG Inc (ZAGG) designs, produces and distributes professional product solutions for mobile devices, including screen protection (glass and film), keyboards for tablet computers and mobile devices, keyboard cases, earbuds, mobile power solutions, cables, and cases under the ZAGG and InvisibleShield brands. In addition, the Company designs, produces and distributes earbuds, headphones, mobile power solutions, Bluetooth speakers, cases and cables for mobile devices under the iFrogz brand in the fashion and youth oriented lifestyle sector. The Company designs product solutions for users of mobile devices, and sells these products to consumers through global distribution partners and online. The Company offers products for various market segments of handheld electronic devices, including smartphones, tablets, notebook computers, laptops, gaming devices, global positioning system (GPS) devices, watch faces, and similar devices and surfaces.
