Item 1.01.
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Entry into a Material Definitive Agreement.
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4.875% Senior Notes due 2027
On May 15, 2017, CDK Global, Inc. (the Company) issued $600 million aggregate principal amount of its 4.875%
Senior Notes due 2027 (the Notes). The Notes were issued pursuant to an indenture, dated as of May 15, 2017 (the Indenture), among the Company and U.S. Bank National Association, as trustee (in such capacity, the
Trustee). The Notes are general unsecured obligations of the Company and are not guaranteed by any of the Companys subsidiaries. The net proceeds from the sale of the Notes will be used by the Company for general corporate
purposes, which may include share repurchases, dividends, acquisitions, repayments of debt, and working capital and capital expenditures.
As the general unsecured obligations of the Company, the Notes rank (i) equally in right of payment with all of the Companys
existing and future senior indebtedness, including indebtedness under the Companys credit facilities and existing senior notes, (ii) senior to all of the Companys future subordinated indebtedness, (iii) effectively subordinated
to all of the Companys existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness and (iv) structurally subordinated to the obligations of the Companys subsidiaries.
The Company will pay interest on the Notes at a rate of 4.875% per annum. Interest on the Notes is payable semiannually to holders of
record at the close of business on May 15 or November 15 immediately preceding the interest payment date on June 1 and December 1 of each year, commencing December 1, 2017. The Notes mature on June 1, 2027.
Prior to June 1, 2022, the Company may redeem the Notes in whole or in part at a price equal to 100% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, plus the applicable make-whole premium.
On or after June 1, 2022, the
Company may redeem the Notes at a price equal to: (i) 102.438% of the aggregate principal amount of the Notes redeemed prior to June 1, 2023; (ii) 101.625% of the aggregate principal amount of the Notes redeemed on or after
June 1, 2023 but prior to June 1, 2024; (iii) 100.813% of the aggregate principal amount of the Notes redeemed on or after June 1, 2024 but prior to June 1, 2025; and (iv) 100.000% of the aggregate principal amount of
the Notes redeemed thereafter.
The Indenture contains covenants that limit the Company and its subsidiaries ability to, among other
things: (i) incur liens on any of their properties or assets; (ii) enter into any sale/leaseback transaction; and (iii) consolidate with, merge with or into, or sell, convey, transfer or lease all or substantially all its assets to,
any other person. These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the
principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately.
Registration Rights Agreement
On May 15, 2017, in connection with the issuance of the Notes, the Company entered into a registration rights agreement with a
representative of the initial purchasers of the Notes, relating to, among other things, an exchange offer for the Notes (the Registration Rights Agreement). Under the Registration Rights Agreement, the Company is obligated to use
commercially reasonable efforts to (i) cause to be filed with the Securities and Exchange Commission (the SEC) a registration statement for exchange offers of freely tradable notes having substantially identical terms as the Notes
issued under the Indenture and (ii) have such registration statement declared effective by the SEC and cause the exchange offers to be completed within 60 business days after such registration statement becomes effective. If the Company is
unable to effect the exchange offer under certain circumstances, the Company is obligated to use commercially reasonable efforts to have a shelf registration statement declared effective by the SEC with respect to resales of the Notes as soon as
practicable after the obligation to file such shelf registration statement arises and to keep such shelf registration statement effective, supplemented and amended until all of the Notes covered by the shelf registration statement cease to be
registrable securities. If the exchange offer is not completed or a shelf registration statement, if required for any reason under the Registration Rights Agreement other than because of a request on the part of a holder of the Notes, does not
become effective within 365 days of the closing date, then the interest rate on the Notes will increase by 0.25% per annum for the first 90-day period following such 365
th
day and
(ii) an additional 0.25% per annum thereafter until the exchange offer is completed, the shelf registration becomes effective or the Notes of the applicable series become freely tradable.