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iRobot(IRBT) - 2025 Q2 - Quarterly Results
iRobotiRobot(US:IRBT)2025-08-07 11:55

Amendment No. 4 to Credit Agreement Introduction and Effectiveness This fourth amendment to the July 24, 2023 Credit Agreement is enacted at the Borrower's request and is effective upon meeting specific conditions - This is the fourth amendment to the Credit Agreement dated July 24, 2023, entered into by iRobot Corporation as the Borrower and TCG Senior Funding L.L.C. as the Agent24 - The effectiveness of this amendment is contingent upon due execution by all parties, the absence of any Default or Event of Default, and the payment of all outstanding fees and expenses9 Representations, Warranties, and General Provisions Loan Parties confirm their authority, reaffirm obligations, release claims against Lenders, and establish New York law as the governing jurisdiction - Each Loan Party represents and warrants that the execution and performance of this amendment are within its corporate powers and have been duly authorized10 - Except for the specific changes outlined, the original Credit Agreement and other Loan Documents remain unmodified and in full force and effect12 - The Loan Parties provide a general release, discharging the Agent and Lenders from any claims existing before the amendment's effective date, except those arising from gross negligence or willful misconduct16 - The amendment and any related disputes shall be governed by and construed in accordance with the laws of the State of New York19 Signatories The amendment is executed by authorized representatives of the Borrower, Guarantors, the Administrative Agent, and all Lenders - The amendment is signed by Gary Cohen, Chief Executive Officer of iRobot Corporation25 - Guarantors include iRobot US Holdings, LLC, iRobot UK Ltd, iRobot France, iRobot Iberia SLU, and iRobot Japan G.K2627 - TCG Senior Funding L.L.C. signs as the Administrative Agent, and various Carlyle-affiliated funds and other entities sign as Lenders282931 Amended Credit Agreement ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS This article defines key terms, financial metrics, and roles, and establishes U.S. GAAP as the accounting standard for the agreement - The agreement provides a comprehensive set of definitions for terms used throughout the document, including financial, legal, and operational terminology58 - A "Change of Control" is defined to occur if any person or group acquires beneficial ownership of more than 35% of the Borrower's voting stock151 - The "Maturity Date" for the loan is the third anniversary of the Closing Date, which was July 24, 2023290 - All accounting terms are to be construed in conformity with U.S. Generally Accepted Accounting Principles (GAAP), and financial calculations must be prepared accordingly464 ARTICLE II: THE COMMITMENTS AND CREDIT EXTENSIONS This article details the $200 million senior secured term loan, including borrowing procedures, interest, repayments, and fee structures Credit Facility Details | Term | Detail | | :--- | :--- | | Facility Type | Senior Secured Term Loan | | Total Commitment | $200,000,000 | | Funding Date | July 25, 2023 | | Repayment | Full principal due on the Maturity Date (3rd anniversary of Closing Date) | Interest and Fees | Item | Rate/Amount | | :--- | :--- | | Applicable Rate (SOFR Loans) | 9.00% per annum | | Applicable Rate (Base Rate Loans) | 8.00% per annum | | PIK Interest Rate | 2.50% per annum (paid in-kind, added to principal) | | Cash Interest Rate | Applicable Rate minus PIK Interest Rate | | MOIC Premium | Varies from 1.30x to 1.75x of principal, depending on timing and Amazon acquisition status | - Mandatory prepayments are required from 100% of net cash proceeds from asset sales exceeding $1.5 million and from the issuance of other indebtedness496497 - Specific rules govern the application of the "Amazon Break Fee" if received, starting with a mandatory $35 million prepayment of the loans498 ARTICLE III: TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY This article protects Lenders from financial burdens by addressing tax withholdings, increased costs, and benchmark rate unavailability - The Borrower must make all payments without deduction for Taxes or pay additional amounts to ensure the Lender receives the full sum573 - If changes in law increase a Lender's cost to maintain its loan, the Borrower must compensate for such increased costs595596 - The agreement includes provisions to replace the benchmark interest rate (Term SOFR) with a "Benchmark Replacement" if a "Benchmark Transition Event" occurs587 - The Borrower has the right to replace any Lender that requests compensation, becomes a Defaulting Lender, or is a "Non-Consenting Lender"608 ARTICLE IV: CONDITIONS PRECEDENT TO CREDIT EXTENSIONS This article specifies conditions for the agreement's effectiveness, including executed documents, perfected security interests, and key third-party consents - Conditions for effectiveness included the delivery of executed Loan Documents, legal opinions, a solvency certificate, and perfection of security interests via UCC-1 filings614615618 - A critical condition was the termination of the Existing Credit Agreement and the release of all associated liens623 - The Borrower was required to obtain and deliver a consent from Amazon, in relation to the Amazon Acquisition Agreement, permitting the new financing625 ARTICLE V: REPRESENTATIONS AND WARRANTIES This article contains statements of fact from the Loan Parties regarding their legal status, financial accuracy, and compliance with laws - The Loan Parties represent they are duly organized and have the power to execute the Loan Documents without contravening laws or organizational documents631632 - The Borrower represents that its financial statements fairly present its financial condition and that no Material Adverse Effect has occurred636639 - The company represents compliance with key regulations, including Sanctions Laws, OFAC, and Anti-Corruption Laws653661665 - On the Closing Date, the Borrower and its subsidiaries, on a consolidated basis, are represented to be Solvent659 ARTICLE VI: AFFIRMATIVE COVENANTS This article outlines the Borrower's ongoing obligations, including financial reporting, notice of defaults, and maintenance of corporate status and assets - The Borrower must deliver audited annual, unaudited quarterly, and monthly financial reports and a Compliance Certificate673675681 - The Borrower is required to promptly notify the Administrative Agent upon the occurrence of any Default or Event of Default689 - The company must maintain its legal existence, properties, and adequate insurance coverage693695696 - New subsidiaries in an Applicable Jurisdiction must become a Guarantor and provide collateral within a specified timeframe704 ARTICLE VII: NEGATIVE COVENANTS This article restricts the Borrower's ability to incur debt, grant liens, sell assets, or make restricted payments to protect Lender interests - The Borrower is prohibited from incurring additional Indebtedness or creating Liens on its assets, except as specifically permitted717728 - The company cannot make any Asset Sale unless it receives at least 75% cash consideration at fair market value and the aggregate value does not exceed $1,000,000735 - Restricted Payments, including dividends and stock repurchases, are generally prohibited subject to specific exceptions738 - The Borrower must maintain Consolidated Core Assets of at least $250,000,000, tested monthly, with this threshold subject to reduction based on certain prepayments753 ARTICLE VIII: EVENTS OF DEFAULT AND REMEDIES This article defines Events of Default and specifies the Lenders' right to accelerate the loan and demand immediate repayment - Events of Default include non-payment, failure to comply with covenants (notably the Minimum Core Assets Test), misrepresentations, and bankruptcy771 - A cross-default is triggered by payment failure on other indebtedness with an aggregate principal amount of $1.5 million or more773 - A Change of Control is also an Event of Default776 - Upon an Event of Default, the Agent may declare the entire unpaid principal, accrued interest, and all other amounts immediately due and payable778 ARTICLE IX: ADMINISTRATIVE AGENT AND OTHER AGENTS This article outlines the authority and duties of the Administrative Agent, protecting it from liability except in cases of gross negligence - Each Lender irrevocably appoints TCG to act as the Administrative Agent and Collateral Agent, authorizing it to take actions on their behalf785786 - The Agent is exculpated from liability for any action taken or omitted, except for its own gross negligence, bad faith, or willful misconduct789 - The Agent is authorized to release collateral or guarantors in connection with transactions permitted by the agreement807 - A detailed "Erroneous Payments" clause requires any recipient to immediately return any funds mistakenly sent by the Administrative Agent821 ARTICLE X: MISCELLANEOUS This final article contains standard legal clauses covering amendments, notices, governing law, and assignment of loans - Amendments generally require the written consent of the Required Lenders (holding more than 50% of the loans) and the Borrower833 - The agreement is governed by the laws of the State of New York, and all parties submit to the exclusive jurisdiction of New York courts891892 - All parties to the agreement irrevocably waive their right to a trial by jury for any claim arising from the Loan Documents896 - Lenders may assign their rights to Eligible Assignees but require the Borrower's consent unless a Specified Event of Default has occurred857858859