UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

  

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 17, 2017

 

ZAGG INC

(Exact name of registrant as specified in charter)

 

Delaware 001-34528 20-2559624
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (I.R.S. Employer
Identification No.)

 

910 West Legacy Center Drive, Suite 500

Midvale, Utah 84047

(Address of principal executive offices)

  

Registrant’s telephone number, including area code: (801) 263-0699

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14.a-12)

 

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 1.01 Entry Into a Material Definitive Agreement

 

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, pursuant 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 2.03 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 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

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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

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: July 17, 2017 ZAGG Inc
   
  /s/ BRADLEY J. HOLIDAY
  Bradley J. Holiday
  Chief Financial Officer

 

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EXHIBIT INDEX

 

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

 

 

5

 

 

Exhibit 10.1

 

THIRD AMENDMENT AGREEMENT

 

This THIRD AMENDMENT AGREEMENT (this “Amendment”) is made as of the 17 th  day of July, 2017 among:

 

(a) ZAGG INC, a Delaware corporation (the “Borrower”);

 

(b) the Lenders, as defined in the Credit Agreement, as hereinafter defined; and

 

(c) KEYBANK NATIONAL ASSOCIATION, a national banking association, as the administrative agent for the Lenders under the Credit Agreement (the “Administrative Agent”).

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders are parties to that certain Credit and Security Agreement, dated as of March 3, 2016 (as amended and as the same may from time to time be further amended, restated or otherwise modified, the “Credit Agreement”);

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders desire to amend the Credit Agreement to modify certain provisions thereof and add certain provisions thereto;

 

WHEREAS, each capitalized term used herein and defined in the Credit Agreement, but not otherwise defined herein, shall have the meaning given such term in the Credit Agreement; and

 

WHEREAS, unless otherwise specifically provided herein, the provisions of the Credit Agreement revised herein are amended effective as of the date of this Amendment;

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Borrower, the Administrative Agent and the Lenders agree as follows:

 

1.  Amendment to Definitions in the Credit Agreement . Section 1.1 of the Credit Agreement is hereby amended to delete the definitions of “Borrowing Base”, “Letter of Credit Commitment”, “Maximum Amount”, “Maximum Revolving Amount”, “Permitted Foreign Subsidiary Loans, Guaranties and Investments”, “Seasonal Increase Period”, “Swing Line Commitment” and “Total Commitment” therefrom and to insert in place thereof, respectively, the following:

 

“Borrowing Base” means an amount equal to the total of the following:

 

(a) up to eighty-five percent (85%) of the aggregate amount due and owing on Eligible Accounts Receivable of the Borrowing Base Companies; plus

 

(b) up to eighty-five percent (85%) of the Appraised Inventory NOLV; plus

 

 

 

 

(c) during the Seasonal Increase Period, Fifteen Million Dollars ($15,000,000); minus

 

(d) Reserves, if any;

 

provided that (A) the aggregate amount of Eligible In-Transit Inventory included in the calculation of subpart (b) above shall not exceed the Eligible In-Transit Inventory Maximum Amount, (B) at no time shall the amount calculated pursuant to subpart (b) above exceed the amount calculated pursuant to subpart (a) above, and (C) anything herein to the contrary notwithstanding, the Administrative Agent shall at all times have the right to modify or reduce such percentages or dollar amount caps or other components of the Borrowing Base from time to time in its reasonable credit judgment.

 

“Letter of Credit Commitment” means the commitment of the Issuing Lender, on behalf of the Revolving Lenders, to issue Letters of Credit in an aggregate face amount of up to Forty Million Dollars ($40,000,000).

 

“Maximum Amount” means, for each Lender in accordance with its Applicable Commitment Percentage, the amount set forth opposite such Lender’s name under the column headed “Maximum Amount” as set forth on Schedule 1 hereto, subject to (a) decreases pursuant to Section 2.9(e) hereof, (b) adjustments in the Maximum Revolving Amount as set forth in the definition thereof, (c) decreases of the Term Loan by virtue of principal payments made, and (d) assignments of interests pursuant to Section 11.11 hereof; provided that the Maximum Amount for the Swing Line Lender shall exclude the Swing Line Commitment (other than its pro rata share), and the Maximum Amount of the Issuing Lender shall exclude the Letter of Credit Commitment (other than its pro rata share thereof).

 

“Maximum Revolving Amount” means (a) for the period from the Third Amendment Effective Date through December 31, 2017, One Hundred Thirty-Five Million Dollars ($135,000,000); (b) for the period from January 1, 2018 through May 31, 2018, One Hundred Ten Million Dollars ($110,000,000); and (c) for the period from June 1, 2018 and thereafter, One Hundred Million Dollars ($100,000,000), as such amount may be reduced pursuant to Section 2.9(e) hereof.

 

“Permitted Foreign Subsidiary Loans, Guaranties and Investments” means:

 

(a) the investments by the Borrower or a Domestic Subsidiary in a Foreign Subsidiary, in such amounts existing as of the Closing Date and set forth on Schedule 5.11 hereto;

 

(b) the loans by the Borrower or a Domestic Subsidiary to a Foreign Subsidiary, in such amounts existing as of the Closing Date and set forth on Schedule 5.11 hereto (and any extension, renewal or refinancing thereof but, only to the extent that the principal amount thereof does not increase after the Closing Date);

 

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(c) any investment by a Foreign Subsidiary in, or loan from a Foreign Subsidiary to, or guaranty from a Foreign Subsidiary of Indebtedness of, a Company;

 

(d) the loan from Borrower to ZAGG International Distribution Limited, a company organized under the laws of Ireland, in the amount of Two Million Dollars ($2,000,000), pursuant to that certain Intercompany Note dated as of April 5, 2017; and

 

(e) any other loan or investment by a Borrower or a Domestic Subsidiary in or to, or guaranty of Indebtedness of, a Foreign Subsidiary for the period from the Third Amendment Effective Date through March 31, 2018, in an aggregate amount for all such loans, investments and guaranties not to exceed Eight Million Dollars ($8,000,000) at any time outstanding during such period.

 

“Seasonal Increase Period” means the period from August 1, 2017 through September 30, 2017.

 

“Swing Line Commitment” means the commitment of the Swing Line Lender to make Swing Loans to the Borrower, on a discretionary basis, up to the aggregate amount at any time outstanding equal to ten percent (10%) of the Maximum Revolving Amount.

 

“Total Commitment Amount” means the sum of the Maximum Revolving Amount plus the principal outstanding on the Term Loan, as such amount may be decreased pursuant to Section 2.9(e) hereof.

 

2.  Addition to Definitions in the Credit Agreement . Section 1.1 of the Credit Agreement is hereby amended to add the following new definition thereto:

 

“Third Amendment Effective Date” means July 17, 2017.

 

3.  Amendment to Schedule 1 . The Credit Agreement is hereby amended to delete Schedule 1 (Commitments of Lenders) therefrom and to insert in place thereof a new Schedule 1 in the form of Schedule 1 hereto.

 

4.  Closing Deliveries . Concurrently with the execution of this Amendment, the Borrower shall:

 

(a) deliver to the Administrative Agent, for delivery to each Lender, a replacement Revolving Credit Note in the amounts specified in Schedule 1 to the Credit Agreement;

 

(b) deliver to the Administrative Agent certified copies of the resolutions of the board of directors of the Borrower evidencing approval of the execution and delivery of this Amendment and the execution of any other Loan Documents and Related Writings required in connection therewith;

 

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(c) execute and deliver to the Administrative Agent the Third Amendment Closing Fee Letter and pay to the Administrative Agent, for the benefit of the Lenders, the fees stated therein;

 

(d) cause each Guarantor of Payment to execute the attached Guarantor Acknowledgment and Agreement; and

 

(e) pay all fees and expenses of the Administrative Agent in connection with this Amendment and any other Loan Documents.

 

5.  Representations and Warranties . The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) the Borrower has the legal power and authority to execute and deliver this Amendment; (b) the officers executing this Amendment have been duly authorized to execute and deliver the same and bind the Borrower with respect to the provisions hereof; (c) the execution and delivery hereof by the Borrower and the performance and observance by the Borrower of the provisions hereof do not violate or conflict with the Organizational Documents of the Borrower or any law applicable to the Borrower or result in a breach of any provision of or constitute a default under any other agreement, instrument or document binding upon or enforceable against the Borrower; (d) no Default or Event of Default exists, nor will any occur immediately after the execution and delivery of this Amendment or by the performance or observance of any provision hereof; (e) each of the representations and warranties contained in the Loan Documents is true and correct in all material respects as of the Third Amendment Effective Date as if made on the Third Amendment Effective Date, except to the extent that any such representation or warranty expressly states that it relates to an earlier date (in which case such representation or warranty is true and correct in all material respects as of such earlier date); (f) the Borrower is not aware of any claim or offset against, or defense or counterclaim to, the Borrower’s obligations or liabilities under the Credit Agreement or any other Related Writing; and (g) this Amendment and the Credit Agreement, as amended by this Amendment, constitute a valid and binding obligation of the Borrower in every respect, enforceable in accordance with its terms.

 

6.  Waiver and Release . The Borrower, by signing below, hereby waives and releases the Administrative Agent, and each of the Lenders, and their respective directors, officers, employees, attorneys, affiliates and subsidiaries, from any and all claims, offsets, defenses and counterclaims, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

 

7.   References to Credit Agreement and Ratification . Each reference to the Credit Agreement that is made in the Credit Agreement or any other Related Writing shall hereafter be construed as a reference to the Credit Agreement as amended hereby. Except as otherwise specifically provided herein, all terms and provisions of the Credit Agreement are confirmed and ratified and shall remain in full force and effect and be unaffected hereby. This Amendment is a Loan Document.

 

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8.  Counterparts . This Amendment may be executed in any number of counterparts, by different parties hereto in separate counterparts and by facsimile or other electronic signature, each of which, when so executed and delivered, shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

 

9.  Headings . The headings, captions and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

 

10.  Severability . Any provision of this Amendment that shall be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

11.  Governing Law . The rights and obligations of all parties hereto shall be governed by the laws of the State of New York.

 

[Remainder of page intentionally left blank.]

 

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JURY TRIAL WAIVER . THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, TO THE EXTENT PERMITTED BY LAW, EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

 

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date first set forth above.

  

  ZAGG INC
   
  By: /s/ RANDALL L. HALES
    Randall L. Hales
    President

 

  Signature Page 1 of 4 to

Third Amendment Agreement

 

 

 

 

KEYBANK NATIONAL ASSOCIATION  

      as the Administrative Agent and as a Lender

   
  By: /s/ MICHAEL GUTIA
    Michael Gutia
    Vice President

 

  Signature Page 2 of 4 to

Third Amendment Agreement

 

 

 

  ZB, N.A. DBA ZIONS FIRST NATIONAL BANK
   
  By: /s/ ADAM WHITEFIELD
    Name: Adam Whitefield
    Title: Vice President

   

  Signature Page 3 of 4 to

Third Amendment Agreement

 

 

 

  JPMORGAN CHASE BANK, N.A.
   
  By: /s/ JAMES FALLAHAY
    Name: James Fallahay
    Title: Authorized Officer

 

  Signature Page 4 of 4 to

Third Amendment Agreement

 

 

 

GUARANTOR ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned consent and agree to and acknowledge the terms of the foregoing Third Amendment Agreement dated as of July 17, 2017. The undersigned further agree that the obligations of the undersigned pursuant to the Guaranty of Payment executed by the undersigned are hereby ratified and shall remain in full force and effect and be unaffected hereby.

 

The undersigned hereby waive and release the Administrative Agent and the Lenders and their respective directors, officers, employees, attorneys, affiliates and subsidiaries from any and all claims, offsets, defenses and counterclaims of any kind or nature, absolute and contingent, of which the undersigned are aware or should be aware, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

 

JURY TRIAL WAIVER . THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND THE UNDERSIGNED, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS GUARANTOR ACKNOWLEDGMENT AND AGREEMENT, THE AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

  

ZAGG LLC  

IFROGZ INC.

 

        MOPHIE INC.
         
By: ZAGG Inc, its Managing Member    

ZAGG INTELLECTUAL PROPERTY HOLDING CO., INC.

 

        ZAGG RETAIL, INC.
  By: /s/ RANDALL L. HALES      
    Randall L. Hales   By: /s/ RANDALL L. HALES
    President     Randall L. Hales
          President
           
MOPHIE LLC       
           
By: mophie Inc, its Managing Member        
           
  By: /s/ RANDALL L. HALES      
     Randall L. Hales      
     President       

 

Signature Page to

Guarantor Acknowledgment and Agreement

 

 

 

SCHEDULE 1

 

COMMITMENTS OF LENDERS*

  

LENDERS   REVOLVING CREDIT
COMMITMENT
PERCENTAGE
    REVOLVING
CREDIT
COMMITMENT
AMOUNT
    TERM LOAN COMMITMENT PERCENTAGE     TERM LOAN
COMMITMENT
AMOUNT
    MAXIMUM AMOUNT  
KeyBank National Association     36.36 %   $ 49,090,909.08       36.36 %   $ 6,060,606.06     $ 55,151,515.14  
ZB, N.A. d/b/a Zions First National Bank     31.82 %   $ 42,954,545.46       31.82 %   $ 5,303,030.25     $ 48,257,575.71  
JPMorgan Chase Bank, N.A.     31.82 %   $ 42,954,545.46       31.82 %   $ 5,303,030.25     $ 48,257,575.71  
Total Commitment Amount     100 %   $ 135,000,000.00       100 %   $ 16,666,666.56     $ 151,666,666.56  

 

* Amounts as of the date of the Third Amendment Agreement.

 

 

S-1

 

 

Exhibit 10.2

 

REVOLVING CREDIT NOTE

 

$49,090,909.08 July 17, 2017

 

FOR VALUE RECEIVED, the undersigned, ZAGG INC, a Delaware corporation (the “Borrower”), promises to pay, on the last day of the Commitment Period, as defined in the Credit Agreement (as hereinafter defined), to the order of KEYBANK NATIONAL ASSOCIATION (“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114-1306 the principal sum of

 

FORTY-NINE MILLION NINETY THOUSAND NINE HUNDRED NINE AND 08/100 DOLLARS

 

or the aggregate unpaid principal amount of all Revolving Loans, as defined in the Credit Agreement, made by Lender to the Borrower pursuant to Section 2.2(a) of the Credit Agreement, whichever is less, in lawful money of the United States of America.

 

As used herein, “Credit Agreement” means the Credit and Security Agreement dated as of March 3, 2016, among the Borrower, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as amended and as the same may from time to time be further amended, restated or otherwise modified. Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

 

The Borrower also promises to pay interest on the unpaid principal amount of each Revolving Loan from time to time outstanding, from the date of such Revolving Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.4(a) of the Credit Agreement. Such interest shall be payable on each date provided for in such Section 2.4(a); provided that interest on any principal portion that is not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base Rate Loans and Eurodollar Loans, interest owing thereon and payments of principal and interest of any thereof, shall be shown on the records of Lender by such method as Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the Borrower under this Note or the Credit Agreement.

 

If this Note shall not be paid at maturity, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate. All payments of principal of and interest on this Note shall be made in immediately available funds.

 

This Note is one of the Revolving Credit Notes referred to in the Credit Agreement and is entitled to the benefits thereof. Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

 

Except as expressly provided in the Credit Agreement, the Borrower expressly waives presentment, demand, protest and notice of any kind. This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

JURY TRIAL WAIVER . THE BORROWER, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

 

 

ZAGG INC

     
  By: /s/ RANDALL L. HALES
    Randall L. Hales
    President

Exhibit 10.3

 

REVOLVING CREDIT NOTE

 

$42,954,545.46 July 17, 2017

 

FOR VALUE RECEIVED, the undersigned, ZAGG INC, a Delaware corporation (the “Borrower”), promises to pay, on the last day of the Commitment Period, as defined in the Credit Agreement (as hereinafter defined), to the order of ZB, N.A. DBA ZIONS FIRST NATIONAL BANK (“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114-1306 the principal sum of

 

FORTY-TWO MILLION NINE HUNDRED FIFTY-FOUR THOUSAND FIVE HUNDRED FORTY-FIVE AND 46/100 -----------------------------------------------------------------------DOLLARS

 

or the aggregate unpaid principal amount of all Revolving Loans, as defined in the Credit Agreement, made by Lender to the Borrower pursuant to Section 2.2(a) of the Credit Agreement, whichever is less, in lawful money of the United States of America.

 

As used herein, “Credit Agreement” means the Credit and Security Agreement dated as of March 3, 2016, among the Borrower, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as amended and as the same may from time to time be further amended, restated or otherwise modified. Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

 

The Borrower also promises to pay interest on the unpaid principal amount of each Revolving Loan from time to time outstanding, from the date of such Revolving Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.4(a) of the Credit Agreement. Such interest shall be payable on each date provided for in such Section 2.4(a); provided that interest on any principal portion that is not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base Rate Loans and Eurodollar Loans, interest owing thereon and payments of principal and interest of any thereof, shall be shown on the records of Lender by such method as Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the Borrower under this Note or the Credit Agreement.

 

If this Note shall not be paid at maturity, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate. All payments of principal of and interest on this Note shall be made in immediately available funds.

 

This Note is one of the Revolving Credit Notes referred to in the Credit Agreement and is entitled to the benefits thereof. Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

 

Except as expressly provided in the Credit Agreement, the Borrower expressly waives presentment, demand, protest and notice of any kind. This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

JURY TRIAL WAIVER . THE BORROWER, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

 

  ZAGG INC
     
  By:

/s/ RANDALL L. HALES

    Randall L. Hales
    President

Exhibit 10.4

 

REVOLVING CREDIT NOTE

 

$42,954,545.46 July 17, 2017

 

FOR VALUE RECEIVED, the undersigned, ZAGG INC, a Delaware corporation (the “Borrower”), promises to pay, on the last day of the Commitment Period, as defined in the Credit Agreement (as hereinafter defined), to the order of JPMORGAN CHASE BANK, N.A. (“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114-1306 the principal sum of

 

FORTY-TWO MILLION NINE HUNDRED FIFTY-FOUR THOUSAND FIVE HUNDRED FORTY-FIVE AND 46/100 .......................................................DOLLARS

 

or the aggregate unpaid principal amount of all Revolving Loans, as defined in the Credit Agreement, made by Lender to the Borrower pursuant to Section 2.2(a) of the Credit Agreement, whichever is less, in lawful money of the United States of America.

 

As used herein, “Credit Agreement” means the Credit and Security Agreement dated as of March 3, 2016, among the Borrower, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as amended and as the same may from time to time be further amended, restated or otherwise modified. Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

 

The Borrower also promises to pay interest on the unpaid principal amount of each Revolving Loan from time to time outstanding, from the date of such Revolving Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.4(a) of the Credit Agreement. Such interest shall be payable on each date provided for in such Section 2.4(a); provided that interest on any principal portion that is not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base Rate Loans and Eurodollar Loans, interest owing thereon and payments of principal and interest of any thereof, shall be shown on the records of Lender by such method as Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the Borrower under this Note or the Credit Agreement.

 

If this Note shall not be paid at maturity, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate. All payments of principal of and interest on this Note shall be made in immediately available funds.

 

This Note is one of the Revolving Credit Notes referred to in the Credit Agreement and is entitled to the benefits thereof. Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

 

Except as expressly provided in the Credit Agreement, the Borrower expressly waives presentment, demand, protest and notice of any kind. This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

JURY TRIAL WAIVER . THE BORROWER, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

 

 

ZAGG INC

     
  By: /s/ RANDALL L. HALES
    Randall L. Hales
    President

 

 

 

 

 

Exhibit 10.5

THIRD AMENDMENT ADMINISTRATIVE AGENT FEE LETTER

 

July 17, 2017

 

ZAGG Inc

910 W. Legacy Center Way

Suite 500

Midvale, UT 84047

 

Ladies and Gentlemen:

 

Reference is made to the Credit and Security Agreement, dated as of the 3 rd day of March, 2016, among ZAGG Inc, a Delaware corporation (the “Borrower”), the lenders from time to time party thereto (together with their respective successors and assigns, collectively, the “Lenders” and, individually, each a “Lender”) and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”) (as the same may from time to time be amended, restated or otherwise modified, the “Credit Agreement”). Reference is also made to that certain Third Amendment Agreement, dated as of July 17, 2017, among the Borrower, the Administrative Agent and the Lenders (the “Third Amendment”).

 

Terms used in this Third Amendment Administrative Agent Fee Letter (this “Letter”) not otherwise defined herein shall be defined as set forth in the Credit Agreement. This Letter confirms the various fee arrangements between the Borrower and the Administrative Agent in connection with the Third Amendment.

 

The Borrower agrees to pay to the Administrative Agent, for its exclusive benefit and not for the benefit of the Lenders, on the Third Amendment Effective Date, an arrangement fee in the amount of Fifty Thousand Dollars ($50,000).

 

The fees provided for herein are nonrefundable and are in addition to any other fees and expenses payable under the Credit Agreement, the Administrative Agent Fee Letter, the Third Amendment or any other Loan Document.

 

This Letter may be executed in any number of counterparts, by different parties hereto in separate counterparts and by facsimile or other electronic signature, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

 

This Letter shall be binding upon and inure to the benefit of the Borrower and the Administrative Agent, and their respective successors and assigns. This Letter is a Loan Document as defined in the Credit Agreement. The rights and obligations of all parties hereto shall be governed by the laws of the State of New York.

 

  Sincerely yours,
   
 

KEYBANK NATIONAL ASSOCIATION

     as the Administrative Agent

     
  By: /s/ MICHAEL GUTIA
    Michael Gutia
    Vice President

 

The undersigned agrees to the terms hereof and agrees to be bound thereby.

 

 

ZAGG INC

     
  By: /s/ RANDALL L. HALES
    Randall L. Hales
    President

 

 

 

 

Signature Page to

Third Amendment Administrative Agent Fee Letter

 

 

Exhibit 10.6

 

THIRD AMENDMENT CLOSING FEE LETTER

 

 

July 17, 2017

 

ZAGG Inc

910 W. Legacy Center Way

Suite 500

Midvale, UT 84047

Attention: Bradley J. Holiday, Chief Financial Officer

 

Ladies and Gentlemen:

 

Reference is made to the Credit and Security Agreement, dated as of the 3rd day of March, 2016, among ZAGG Inc, a Delaware corporation (the “Borrower”), the lenders from time to time party thereto (together with their respective successors and assigns, collectively, the “Lenders” and, individually, each a “Lender”) and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”) (as the same may from time to time be amended, restated or otherwise modified, the “Credit Agreement”). Reference is also made to that certain Third Amendment Agreement, dated as of July 17, 2017, among the Borrower, the Administrative Agent and the Lenders (the “Third Amendment”).

 

Terms used in this Third Amendment Closing Fee Letter (this “Letter”) not otherwise defined herein shall be defined as set forth in the Credit Agreement. This Letter confirms the closing fee arrangement among the Borrower, the Administrative Agent and the Lenders in connection with the Third Amendment. On the Third Amendment Effective Date, the Borrower agrees to pay to the Administrative Agent, for distribution to each of the Lenders, the closing fees set forth on Exhibit A through Exhibit C hereto.

 

This Letter may be executed in any number of counterparts, by different parties hereto in separate counterparts and by facsimile or other electronic signature, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

 

[Remainder of page intentionally left blank.]

 

 

 

This Letter is the Third Amendment Closing Fee Letter referenced in the Third Amendment. This Letter shall be binding upon and inure to the benefit of the Borrower and the Administrative Agent and their respective successors and assigns. This Letter is a Loan Document as defined in the Credit Agreement.

 

The rights and obligations of all of the parties hereto shall be governed by the laws of the State of New York.

 

  Sincerely yours, 
     
 

KEYBANK NATIONAL ASSOCIATION

     as the Administrative Agent

     
 

By:

/s/ MICHAEL GUTIA
    Michael Gutia
    Vice President

 

The undersigned agrees to the terms hereof and agrees to be bound thereby.

 

  ZAGG INC
     
  By: /s/ RANDALL L. HALES
    Randall L. Hales
    President

 

Signature Page to

Third Amendment Closing Fee Letter

 

 

 

EXHIBIT A

 

CLOSING FEES

 

Lender   Upfront
Fee
    Amendment Fee  
KeyBank National Association   $ 23,636.36     $ 10,000.00  

 

  E- 1  

 

 

EXHIBIT B

 

CLOSING FEES

 

Lender   Upfront
Fee
    Amendment Fee  
Zions Bank   $ 20,681.82     $ 10,000.00  

  

  E- 2  

 

 

EXHIBIT C

 

CLOSING FEES

 

Lender   Upfront
Fee
    Amendment Fee  
JPMorgan Chase Bank, N.A.   $ 20,681.82     $ 10,000.00  

 

 

E-3