Exhibit 10.1

 

THIRD AMENDMENT AGREEMENT

 

This THIRD AMENDMENT AGREEMENT (this “Amendment”) is made as of the 17th 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.

 

 

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