Item 1.01. Entry into a Material Definitive Agreement
On October 17, 2017, ARRIS International plc (the Company), ARRIS Group, Inc. (ARRIS), ARRIS Enterprises LLC, and
certain ARRIS subsidiaries, as borrowers, and Bank of America, N.A., as administrative agent, swing line lender and L/C lender and the other lender parties thereto entered into that certain Third Amendment and Consent (the Amendment) to
the Credit Agreement dated as of March 27, 2013, as amended and restated as of June 18, 2015 (the Credit Agreement and, as amended by the Amendment, the Amended Credit Agreement). Pursuant to the Amendment, ARRIS
(i) incurred Refinancing Term A Loans of $391 million, (ii) incurred Refinancing Term
A-1
Loans of $1,250 million, and (iii) obtained a Refinancing
Revolving Credit Facility of $500 million (together with the Refinancing Term A Loans and the Refinancing Term
A-1
Loans, the Refinancing Facilities), the proceeds of which were used to
refinance in full the existing Term A Loans, the existing Term
A-1
Loans and the existing Revolving Credit Loans outstanding under the Credit Agreement immediately prior to the effectiveness of the Amendment.
The existing Term B Loans were not refinanced and remain outstanding.
The Amendment extends the maturity date of the Refinancing
Facilities to October 17, 2022. The Term Loan B Facility maturity date is unchanged and is April 26, 2024. Pursuant to the Amendment, the Company is subject to a minimum consolidated interest coverage ratio test, which is unchanged from
the Credit Agreement. In addition, the Company is subject to a maximum consolidated net leverage ratio test of not more than 4.0:1.0, subject to a step-down to 3.75:1.00 commencing with the fiscal quarter ending March 31, 2019. The amount of
unrestricted cash used to offset indebtedness in the calculation of the consolidated net leverage ratio was also increased from $200 million to $500 million. The interest rates under the Refinancing Facilities are unchanged.
Borrowings under the Amended Credit Agreement are secured by first priority liens on substantially all of the assets of the Company and
certain of its present and future subsidiaries who are or become parties to, or guarantors under, the Amended Credit Agreement. The Amended Credit Agreement contains usual and customary limitations on indebtedness, liens, restricted payments,
acquisitions and asset sales in the form of affirmative, negative and financial covenants, which are customary for financings of this type. The Amended Credit Agreement provides terms for mandatory prepayments and optional prepayments and commitment
reductions. The Amended Credit Agreement also includes events of default, which are customary for facilities of this type (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default,
all amounts outstanding under the credit facilities may be accelerated.
The foregoing summary of the Amendment does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of the Amendment, which is attached as Exhibit 10.1 to this Current Report on Form
8-K,
and is incorporated herein by reference.