Digi International Inc.
12/30/2025 | Press release | Distributed by Public on 12/30/2025 15:26
Material Agreement (Form 8-K)
| Item 1.01 |
Entry into a Material Definitive Agreement.
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On December 23, 2025 (the "First Amendment Effective Date"), Digi International, Inc. ("Digi") entered into a First Amendment to Revolving Credit Agreement (the "Amendment") with BMO Bank N.A. ("BMO"), as administrative and collateral agent, certain subsidiaries of Digi as guarantors ("Guarantors") and the several banks and other financial institutions or entities party thereto as lenders (the "Lenders"), which amended that certain Revolving Credit Agreement ("Original Credit Agreement", as amended by the Amendment, the "Credit Agreement"), dated as of December 7, 2023 among Digi, BMO, the Guarantors party thereto and the Lenders from time to time party thereto. The Amendment modifies the Credit Agreement to, among other things, (i) add a new level for purposes of calculating the commitment fee rate and the applicable margin used to calculate the interest rates applicable to base rate loans and Term SOFR loans when Digi has a total net leverage ratio equal to or greater than 3.00:1.00 as of the end of any fiscal quarter, (ii) amend the commitment fee rate and the applicable margin percentages for base rate loans and Term SOFR loans as further set forth below to generally reduce the applicable margin percentages from the Original Credit Agreement when Digi has a total net leverage ratio of less than 2.50:1.00 and the commitment fee from the Original Credit Agreement when Digi has a total net leverage ratio of less than 3:00:1.00 but greater than 1.75:1.00, in each case as of the end of any quarter, (iii) remove the 10 basis point credit spread adjustment on Term SOFR Loans and (iv) increase the uncommitted accordion feature for additional borrowing capacity from the greater of $95 million or one hundred percent of trailing twelve month adjusted earnings before interest, taxes, depreciation, and amortization to the greater of $105 million or one hundred percent of trailing twelve month adjusted earnings before interest, taxes, depreciation, and amortization.
From the First Amendment Effective Date, the applicable margin for loans under the Credit Agreement shall have five pricing levels (increased from four pricing levels under the Original Credit Agreement), adding a level V pricing level based on a total net leverage ratio of equal to or greater than 3.00 to 1.00. The applicable margin percentages for each pricing level were amended to provide for a range of 1.35% to 3.10% for Term SOFR loans (which ranged from 1.75% to 2.75% under the Original Credit Agreement) and 0.35% to 2.10% for base rate loans (which ranged from 0.75% to 1.75% under the Original Credit Agreement), depending on Digi's total net leverage ratio. The applicable margin for borrowings from the First Amendment Effective Date until the date that is five business days after the day on which Digi provides a compliance certificate for the fiscal quarter ending December 31, 2025 shall be equal to 0.85% for base rate loans and 1.85% for Term SOFR loans, a reduction from the levels in the Original Credit Agreement.
The foregoing description of the Amendment does not purport to be complete and is qualified by reference to the full text of the Amendment, which is attached as Exhibit 10.1 to this current report on Form 8-K and incorporated herein by reference.
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