Exhibit 10.2

 

EXECUTION VERSION

 

FOURTH AMENDMENT TO AMENDED AND RESTATED
  CREDIT AGREEMENT

 

This Fourth Amendment to Amended and Restated Credit Agreement (the “Amendment”), is made this 27th day of March, 2014 among CROCS, INC., a corporation organized under the laws of the State of Delaware (“Crocs”), CROCS RETAIL, INC., a corporation organized under the laws of the State of Colorado (“Retail”), OCEAN MINDED, INC., a corporation organized under the laws of the State of Colorado (“Ocean”), JIBBITZ, LLC, a limited liability company organized under the laws of the State of Colorado (“Jibbitz”), BITE, INC., a corporation organized under the laws of the State of Colorado (“Bite”, together with Crocs, Retail, Ocean, Jibbitz and each other Person joined as a borrower from time to time to the Credit Agreement (as defined below), collectively “Borrowers” and each a “Borrower”), the financial institutions which are now party to the Credit Agreement as lenders and who execute this Amendment  (collectively, the “Consenting Lenders” and each individually a “Consenting Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Administrative Agent”).

 

BACKGROUND

 

A.                                    On December 16, 2011, Borrowers, Lenders and Administrative Agent entered into, inter alia, that certain Amended and Restated Credit Agreement (as same has been or may hereafter be amended, modified, renewed, extended, restated or supplemented from time to time, including without limitation as amended by that certain First Amendment to Amended and Restated Credit Agreement by and among the parties hereto dated as of December 10, 2012, that certain Second Amendment to Amended and Restated Credit Agreement by and among the parties hereto dated as of June 12, 2013, and that certain Third Amendment to Amended and Restated Credit Agreement by and among the parties hereto dated as of December 27, 2013, the “Credit Agreement”) to reflect certain financing arrangements among the parties thereto.  The Credit Agreement and all other documents executed in connection therewith to the date hereof are collectively referred to as the “Existing Financing Agreements”.  All capitalized terms used and not otherwise defined herein shall have the meaning ascribed thereto in the Credit Agreement, as amended hereby.

 

B.                                    Borrowers have requested and Administrative Agent and Consenting Lenders have agreed to modify certain terms and provisions of the Credit Agreement on the terms and subject to the conditions contained in this Amendment.  For the avoidance of doubt, the Consenting Lenders are sufficient to constitute Required Lenders.

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

Section 1.                                          Amendments to Credit Agreement.

 

(a)                                 Definitions. Upon the Effective Date, the following definitions in Section 1.1 of the Credit Agreement shall be amended and restated in their entirety as follows:

 











 

Consolidated EBITDAR shall mean for any period the sum of (i) net income (or loss) of Borrowers on a Consolidated Basis for such period (excluding, in each case to the extent incurred or charged during the applicable period: (w) one-time non-cash charges with the consent of Administrative Agent in the aggregate not to exceed $25,000,000 for such period and non-cash share based compensation expenses, (x) any transaction costs associated with the Preferred Stock Issuance in an amount not to exceed $30,000,000 in the aggregate to the extent paid within 180 days of the closing of the Preferred Stock Issuance, and (y) cash and non-cash charges incurred during fiscal years 2013 and 2014 in connection with store closings or restructuring, charges for inventory obsolescence, other corporate restructuring activities or contingent liabilities, in an amount not to exceed $25,000,000 in the aggregate or $10,000,000 with respect to cash charges), plus (ii) all interest expense of Borrowers on a Consolidated Basis for such period, plus (iii) all charges against income of Borrowers on a Consolidated Basis for such period for federal, state and local taxes, plus (iv) depreciation expenses for such period, plus (v) amortization expenses for such period, plus (vi) Borrowers’ aggregate Rental Expenses for such period.

 

Fixed Charges  shall mean for any period of determination the sum of cash interest expense, cash income taxes, scheduled principal installments on Indebtedness (as adjusted for prepayments), Unfunded Capital Expenditures and payments under Capitalized Leases, Rental Expenses and cash dividends and distributions (including tax distributions) when actually paid, in each case, of the Borrowers on a Consolidated Basis; provided however that to the extent paid in the applicable testing period, Fixed Charges shall not include any payments made in connection with a tax settlement with the Canadian tax authorities in an amount not to exceed $10,000,000 in the aggregate.

 

(b)                                 Definitions. Upon the Effective Date, the following definition shall be added to  Section 1.1 of the Credit Agreement in the appropriate alphabetical sequence:

 

Unfunded Capital Expenditures  shall mean, as to any Borrower, without duplication, a Capital Expenditure funded (a) from such Borrower’s internally generated cash flow or (b) with the proceeds of a Revolving Credit Loan or a Swing Loan.

 

(c)                                  Section 8.2.14                   Minimum Fixed Charge Coverage Ratio.                    Upon the Effective Date, Section 8.2.14 of the Credit Agreement shall be amended and restated in its entirety as follows:

 

8.2.14              Minimum Fixed Charge Coverage Ratio.  The Loan Parties shall not permit the Fixed Charge Coverage Ratio to be less than the following ratios for the following time periods, in each case calculated as of the end of each fiscal quarter for the four (4) fiscal quarters then ended:

 

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Period
    	
 
    	
Minimum Fixed Charge Coverage
   Ratio
    
	
Fiscal   Quarter Ending March 31, 2014
    	
 
    	
1.15   to 1.00
    
	
Fiscal   Quarter Ending June 30, 2014
    	
 
    	
1.15   to 1.00
    
	
Fiscal   Quarter Ending September 30, 2014
    	
 
    	
1.20   to 1.00
    
	
Fiscal   Quarter Ending December 31, 2014
    	
 
    	
1.20   to 1.00
    
	
Fiscal   Quarter Ending March 31, 2015 and each Fiscal Quarter Thereafter
    	
 
    	
1.25   to 1.00
    


 

Notwithstanding anything to the contrary, for purposes of calculating the Fixed Charge Coverage Ratio for any applicable testing period, any costs incurred in fiscal year 2014 by the Loan Parties in connection with the implementation of a SAP software system,  in an aggregate amount not to exceed $30,000,000, shall not be deemed to be Unfunded Capital Expenditures or included in Fixed Charges.

 

Section 2.                                          Acknowledgment of Guarantors.  By execution of this Amendment, each Guarantor hereby covenants and agrees that each of the Amended and Restated  Guaranty and Suretyship Agreements dated December 16, 2011 shall remain in full force and effect and shall continue to cover the existing and future Obligations of Borrowers to Administrative Agent and Lenders under the Credit Agreement.

 

Section 3.                                          Conditions Precedent.  This Amendment shall be effective upon (the “Effective Date”):

 

(a)                                 Administrative Agent’s receipt of this Amendment fully executed by the Borrowers, the Guarantors, Administrative Agent and Consenting Lenders;

 

(b)                                 Administrative Agent shall have received a non refundable amendment fee in the amount of $30,000, which fee shall be fully earned upon execution hereof and payable pro rata to all Consenting Lenders who consent to this Amendment in accordance with such Consenting Lender’s Commitment percentage; and

 

(c)                                  Receipt by Administrative Agent of resolutions (authorizing their respective guarantees) and incumbency certificates for Western Brands Holding Company, LLC and RA Footwear, LLC.

 

Section 4.                                          Representations and Warranties.  Each Borrower:

 

(a)                                 reaffirms all representations and warranties made to Administrative Agent and Lenders under the Credit Agreement and all of the other Existing Financing Agreements and confirms that all are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);

 

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(b)                                 reaffirms all of the covenants contained in the Credit Agreement, covenants to abide thereby until satisfaction in full of the Obligations and termination of the Credit Agreement;

 

(c)                                  represents and warrants to the Administrative Agent and the Lenders that no Potential Default or Event of Default has occurred and is continuing under any of the Existing Financing Agreements;

 

(d)                                 represents and warrants to the Administrative Agent and the Lenders that it has the authority and legal right to execute, deliver and carry out the terms of this Amendment, that such actions were duly authorized by all necessary limited liability company or corporate action, as applicable, and that the officers executing this Amendment on its behalf were similarly authorized and empowered, and that this Amendment does not contravene any provisions of its certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any contract or agreement to which it is a party or by which any of its properties are bound; and

 

(e)                                  represents and warrants to the Administrative Agent and the Lenders that this Amendment and all assignments, instruments, documents, and agreements executed and delivered in connection herewith, are valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.

 

Section 5.                                          General Provisions.

 

(a)                                 Payment of Expenses.  Borrowers shall pay or reimburse Administrative Agent and Lenders for their reasonable attorneys’ fees and expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.

 

(b)                                 Reaffirmation of Credit Agreement.  Except as modified by the terms hereof, all of the terms and conditions of the Credit Agreement, as amended, and all of the other Existing Financing Agreements are hereby reaffirmed and shall continue in full force and effect as therein written.

 

(c)                                  Third Party Rights.  No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.

 

(d)                                 Headings.  The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.

 

(e)                                  Modifications.  No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.

 

(f)                                   Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York.

 

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(g)                                  Counterparts.  This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission or PDF shall be deemed to be an original signature hereto.

 

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
CROCS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CROCS   RETAIL, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
OCEAN   MINDED, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JIBBITZ,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BITE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Chief   Financial Officer
    


 

[Signature Page to Fourth Amendment]

 

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GUARANTORS:
    
	
 
    	
 
    
	
 
    	
WESTERN   BRANDS HOLDING COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Chief   Financial Officer and Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
RA   FOOTWEAR, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Authorized   Representative
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FURY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey J. Lasher
    
	
 
    	
Name:
    	
Jeffrey   J. Lasher
    
	
 
    	
Title:
    	
Chief   Financial Officer
    


 

[Signature Page to Fourth Amendment]

 

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ADMINISTRATIVE   AGENT AND LENDERS:
    
	
 
    	
 
    
	
 
    	
PNC   BANK, NATIONAL ASSOCIATION, As Lender and as   Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Steve C. Roberts
    
	
 
    	
Name:
    	
Steve   C. Roberts
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A., as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Monica Popowczak
    
	
 
    	
Name:
    	
Monica   Popowczak
    
	
 
    	
Title:
    	
Underwriter
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, N.A., as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    


 

[Signature Page to Fourth Amendment]

 

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