Item. 1.01 Entry into a Material Definitive Agreement.

Credit Agreement

On February 19, 2019 (the “ Closing Date ”), Roku, Inc. entered into a Credit Agreement, by and among us, as borrower, the lenders (“ Lenders ”) and issuing banks from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (the “ Administrative Agent ”) and collateral agent (the “ Credit Agreement ”). The Credit Agreement provides for (i) a four-year revolving credit facility in the aggregate principal amount of up to $75,000,000 (the “ Revolving Credit Facility ”), (ii) a four-year delayed draw term loan A facility in the aggregate principal amount of up to $75,000,000 (the “ Term Loan A Facility ”) and (iii) an uncommitted incremental facility, subject to the satisfaction of certain financial and other conditions, in the amount of up to (v) $50,000,000, plus (w) 1.0x of our consolidated EBITDA for the most recently completed four fiscal quarter period, plus (x) an additional amount at our discretion, so long as, on a pro forma basis at the time of incurrence, our secured leverage ratio does not exceed 1.50 to 1.00, plus (y) voluntary prepayments of the Revolving Credit Facility and Term Loan A Facility to the extent accompanied by concurrent reductions to the applicable Credit Facility, plus (z) for up to 90 days after the Closing Date, $75,000,000 (together with the Revolving Credit Facility and the Term Loan A Facility, collectively, the “ Credit Facility ”). Borrowings under the Term Loan A Facility may be made by us up to 9 months immediately following the Closing Date (the “ Term Loan A Availability Period ”). We did not make any borrowings under the Credit Agreement on the Closing Date. On or around the Closing Date, except for certain letters of credit, which were cash collateralized by approximately $26.3 million , we also repaid all outstanding obligations under our Amended and Restated Loan and Security Agreement, entered into with Silicon Valley Bank on November 18, 2014 (as amended prior to the date hereof, the “ SVB Loan Agreement ”), and the SVB Loan Agreement was terminated.

Each Lender’s obligation to fund future loans or issue future letters of credit under the Credit Facility is subject to the satisfaction of certain conditions set forth in the Credit Agreement.

Loans under the Credit Facility bear interest at a rate equal to, at our election (i) an alternate base rate, based upon the highest of (x) the prime rate published by the Wall Street Journal, (y) the federal funds effective date plus ½ of 1% and (z) the one-month LIBO rate plus 1.00%, in each case plus an applicable margin of up to 1.00% per annum, with step-downs based on our secured leverage ratio or (ii) an adjusted one-, two-, three-, or six month LIBO rate, at our election, plus an applicable margin of up to 2.00% per annum, with step-downs based on our secured leverage ratio.

As of the Closing Date, there are no guarantors under the Credit Agreement, however the obligations under the Credit Agreement may be guaranteed by our subsequently acquired or formed direct and indirect subsidiaries (other than certain immaterial subsidiaries, foreign subsidiaries, and subject to other exceptions set forth in the Credit Agreement). Our obligations under the Credit Agreement and any swap and cash management obligations are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in (i) all our tangible and intangible assets, except for certain customary excluded assets and (ii) all of the capital stock owned by us (limited to, in the case of the stock of certain of our first-tier non-U.S. subsidiaries, 65% of the voting interests of such subsidiaries, and subject to certain other customary exceptions set forth in the Credit Agreement).

We are permitted to make voluntary prepayments of the loans under the Credit Agreement at any time without payment of a premium. We are required to make mandatory prepayments of loans under the Credit Agreement (without payment of a premium) with (a) net cash proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions), (b) casualty proceeds and condemnation awards (subject to reinvestment rights and other exceptions) and (c) net cash proceeds from issuances of debt or disqualified capital stock (other than certain permitted debt); provided that the mandatory prepayment requirements set forth in the foregoing clauses (a) and (b) shall only take effect beginning on the date that is the earlier of (i) 9 months after the Closing Date and (ii) the date that the Term Loan A Facility is fully-drawn, unless we terminate the Term Loan A Availability Period prior to such date.

Loans under the Term Loan A Facility will amortize in equal quarterly installments beginning on the last day of the fiscal quarter ending after the date of the initial borrowing under the Term Loan A Facility, in an aggregate annual amount equal to (i) on or prior to December 31, 2021, 1.25% of the drawn principal amount of the Term Loan Facility and (ii ) thereafter, 2.50% of the drawn principal amount of the Term Loan Facility, with any remaining balance payable on the maturity date of the Term Loan A Facility.

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, limitations on restrictive agreements, fundamental changes and business activities, investments, mergers, dispositions, transactions with affiliates, prepayment of other indebtedness and dividends and other distributions. The Credit Agreement also contains a financial covenant requiring us to maintain a minimum adjusted quick ratio of 1.00 to 1.00, tested as of the last day of any fiscal quarter on the basis of the prior period of our four consecutive fiscal quarters.

Events of default under the Credit Agreement include: (i) our failure, or the failure of any future guarantors under the Credit Agreement (each a “ Loan Party ”) to timely make payments due under the Credit Agreement; (ii) material misrepresentations or misstatements in any representation or warranty by any Loan Party when made; (iii) failure by any Loan Party to comply with the covenants under the Credit Agreement and other related agreements; (iv) certain defaults by us or our restricted subsidiaries under other indebtedness in a principal amount in excess of a specified threshold; (v) insolvency or bankruptcy-related events with respect to us or any of our material subsidiaries; (vi) certain undischarged judgments in excess of a specified threshold against us or any of our material restricted subsidiaries; (vii) certain ERISA-related events reasonably expected to have a material adverse effect on us and our restricted subsidiaries, taken as a whole; (viii) certain security interests or liens under the loan documents ceasing to be, or being asserted by any Loan Party not to be, in full force and effect; (ix) any loan document or material provision thereof ceasing to be, or any challenge or assertion by any Loan Party that such loan document or material provision is not, in full force and effect; and (x) the occurrence of a change of control. If one or more events of default occurs and continues beyond any applicable cure period, the Administrative Agent may, with the consent of the Lenders holding a majority of the loans and commitments under the facilities, or will, at the request of such Lenders, terminate the commitments of the Lenders to make further loans and declare all of the obligations of the Loan Parties under the Credit Agreement to be immediately due and payable.

The foregoing summary is qualified in its entirety by reference to the complete terms and conditions of the Credit Agreement, which we will file  as an exhibit to our next Annual Report on Form 10 -K.