Item 1.01
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Entry into a Material Definitive Agreement.
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On October 6, 2017, Alarm.com Holdings, Inc., or
Alarm.com, and its wholly owned subsidiary Alarm.com Incorporated, or, together with Alarm.com, the Company, refinanced the $72 million outstanding under its prior revolving credit facility, or the Prior Facility, by entering into a new
$125 million senior secured revolving credit facility, or the 2017 Facility, with Silicon Valley Bank, or SVB, as administrative agent, PNC Bank, National Association, or PNC, as Documentation Agent, and a syndicate of lenders, currently
comprised of SVB, PNC, Bank of America N.A., and JPMorgan Chase Bank, N.A. Upon entry into the 2017 Facility, the Company borrowed $72 million, which amounts were used to repay the previously outstanding balance under the Prior Facility as
further described below, and as of the date hereof, the outstanding balance under the 2017 Facility remained at $72 million and no additional amounts have been drawn under the 2017 Facility. The 2017 Facility matures in October 2022 and
includes an option to further increase the borrowing capacity to $175 million with the consent of the lenders.
The outstanding principal balance of
the 2017 Facility accrues interest at a rate equal to, at Alarm.coms option, either (1) the Eurodollar Base Rate, or LIBOR, plus an applicable margin based on the Alarm.coms consolidated leverage ratio, or (2) the highest of
(a) the Wall Street Journal prime rate, (b) the Federal Funds rate plus 0.50% or (c) LIBOR plus 1.0%, plus an applicable margin based on Alarm.coms consolidated leverage ratio. The 2017 Facility also carries an annual unused
line commitment fee of 0.20%, payable quarterly.
The 2017 Facility contains customary conditions to borrowings and events of default and contains various
negative covenants, including covenants that restrict the Companys ability to dispose of assets, merge with or acquire other entities, incur indebtedness, incur encumbrances, make certain payments including dividends, make investments or
engage in transactions with affiliates without approval of the lenders. The 2017 Facility also includes financial covenants with respect to consolidated leverage ratio and fixed charge coverage ratio, which are tested quarterly. The Companys
obligations under the 2017 Facility are secured by substantially all of the Companys assets, including intellectual property, and guaranteed by substantially all of the Companys domestic subsidiaries.
The foregoing description of the material terms of the 2017 Facility does not purport to be complete and is subject to, and is qualified in its entirety by,
reference to the full terms of the credit agreement, which the Company intends to file as an exhibit to the Companys Annual Report on Form
10-K
for the year ended December 31, 2017 or an earlier
filed periodic report.
Item 1.02
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Termination of a Material Definitive Agreement
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In connection with the entry into the 2017 Facility, on
October 6, 2017, the Company terminated and refinanced its $75 million Prior Facility with SVB as administrative agent, and a syndicate of lenders. The outstanding principal balance on the Prior Facility accrued interest at a rate equal
to, at Alarm.coms option, either (1) the Eurodollar Base Rate plus an applicable margin based on the Alarm.coms consolidated leverage ratio, or (2) the higher of (a) the Wall Street Journal prime rate and (b) the
Federal Funds rate plus 0.50% plus an applicable margin based on Alarm.coms consolidated leverage ratio. The Prior Facility also carried an unused line commitment fee of 0.20% to 0.25% depending on Alarm.coms consolidated leverage ratio.
During the year ended December 31, 2016 and the six months ended June 30, 2017, the effective interest rate on the Prior Facility was 2.82% and 3.34%, respectively.