Document:

Exhibit 10.23

 

EXECUTION DRAFT

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of July 17, 2017, is by and among YETI HOLDINGS, INC., a Delaware corporation (the “Borrower”), the Lenders party hereto and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the “Administrative Agent”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.

 

W I T N E S S E T H

 

WHEREAS, the Borrower, certain banks and financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent are parties to that certain Credit Agreement dated as of May 19, 2016 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower has requested that the Lenders amend certain provisions of the Credit Agreement; and

 

WHEREAS, the Required Lenders are willing to make such amendments to the Credit Agreement, in accordance with and subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I
 AMENDMENTS TO CREDIT AGREEMENT

 

1.1                               New Definitions.  The following definitions are hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order:

 

“First Amendment” means that certain First Amendment to Credit Agreement, dated as of July 17, 2017, by and among the Borrower, the Administrative Agent, and the financial institutions party thereto.

 

“First Amendment Effective Date” has the meaning set forth in the First Amendment.

 

“Rambler On” means Rambler On LLC, a Delaware limited liability company.

 

 

“Rambler On Acquisition” means the Borrower’s acquisition of Rambler On on the Rambler On Acquisition Date.

 

“Rambler On Acquisition Date” means May 16, 2017.

 

1.2                               Amendment to Definitions.

 

(a)                                 the definition of “Consolidated EBITDA” set forth in Section 1.01 of the Credit Agreement is hereby amended by

 

(i)                                     adding the following sentence at the end of the definition:

 

“Consolidated EBITDA shall be $71,819,944, $43,411,343, and $4,650,014 for the Fiscal Quarters ended September 30, 2016, December 31, 2016 and March 31, 2017, respectively.”                  and

 

(ii)                                  amending and restating the second proviso in clause (b)(vii) in its entirety as follows:

 

“provided, further, that the foregoing shall not include any excess costs incurred (i) related to the shipment of finished goods using air freight as compared to comparable sea freight alternatives from third party foreign manufacturing partners or (ii) related to adding additional features to existing drinkware products in inventory (other than such excess costs related to adding additional features to existing drinkware products currently in inventory not to exceed $3,000,000 in the Fiscal Quarter ended September 30, 2017),”

 

(b)                                 The definition of “Total Net Leverage Ratio” set forth in Section 1.01 of the Credit Agreement is hereby amended by deleting the reference to “$75,000,000” in clause (a) thereof and replacing it with “$50,000,000.”

 

1.3                               Amendment to Section 1.05.  Section 1.05 of the Credit Agreement is hereby amended by adding the following sentence at the end thereof:

 

“Notwithstanding the foregoing, calculations for purposes of determining compliance with the covenants contained in Article VI (including Sections 6.11 and 6.12), Section 7.02 or otherwise for the purpose of determining the Total Secured Net Leverage Ratio, the Total Net Leverage Ratio, the Interest Coverage Ratio and Consolidated EBITDA, shall be made without giving effect to the Rambler On Acquisition on a Pro Forma Basis, but for the avoidance of doubt, shall include the results of Rambler On since the Rambler On Acquisition Date.”

 

1.4                            Amendment to Section 2.20. Section 2.20(a) of the Credit Agreement is hereby amended by deleting the reference to “$125,000,000” in clause (iii)(x) thereof and replacing it with “$100,000,000.”

 

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1.5                               Amendment to Section 6.11.  Section 6.11 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

“SECTION 6.11 Total Net Leverage Ratio.  The Borrower will not permit the Total Net Leverage Ratio as of the end of any Fiscal Quarter set forth below to exceed the level set forth opposite such Fiscal Quarter in the table below:

 

	
Fiscal Quarter Ending
    	
 
    	
Maximum Ratio
    	
 
    
	
Prior to and including March 31, 2017
    	
 
    	
3.50 to 1.00
    	
 
    
	
June 30, 2017
    	
 
    	
N/A
    	
 
    
	
September 30, 2017
    	
 
    	
6.50 to 1.00
    	
 
    
	
December 31, 2017
    	
 
    	
6.50 to 1.00
    	
 
    
	
March 31, 2018
    	
 
    	
5.50 to 1.00
    	
 
    
	
June 30, 2018
    	
 
    	
4.50 to 1.00
    	
 
    
	
September 30, 2018
    	
 
    	
4.25 to 1.00
    	
 
    
	
December 31, 2018
    	
 
    	
4.00 to 1.00
    	
 
    
	
March 31, 2019 and thereafter
    	
 
    	
3.50 to 1.00
    	
 
    

 

ARTICLE II
 CONDITIONS TO EFFECTIVENESS

 

2.1                               Closing Conditions.  This Amendment shall become effective as of the day and year set forth above (the “First Amendment Effective Date”) upon satisfaction (or waiver) of the following conditions (in each case, in form and substance reasonably acceptable to the Administrative Agent):

 

(a)                                 Executed Amendment.  The Administrative Agent shall have received a copy of this Amendment duly executed by each of the Loan Parties, the Required Lenders and the Administrative Agent.

 

(b)                                 Default.  After giving effect to this Amendment, no Default or Event of Default shall exist.

 

(c)                                  Fees and Expenses.  The Administrative Agent shall have received from the Borrower, for its account and the account of each Lender party hereto, such fees and expenses that are payable in connection with the consummation of the transactions contemplated hereby including, without limitation, payment of the fees and expenses described in Section 3.6 hereof.

 

(d)                                 Miscellaneous.  All other documents and legal matters in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

 

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ARTICLE III
 MISCELLANEOUS

 

3.1                               Amended Terms.  On and after the First Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment.  Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

 

3.2                               Representations and Warranties of Loan Parties.  The Borrower represents and warrants as follows:

 

(a)                                 It has taken all necessary corporate action to authorize the execution, delivery and performance of this Amendment.

 

(b)                                 This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(c)                                  No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.

 

(d)                                 After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.

 

(e)                                  The Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims as of the date hereof.

 

3.3                               Reaffirmation of Obligations.  Each Loan Party hereby ratifies each Loan Document to which it is a party and acknowledges and reaffirms (a) that it is bound by all terms of each Loan Document applicable to it to which it is a party and (b) that it is responsible for the observance and full performance of its respective Obligations.

 

3.4                               Loan Document.  This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

 

3.5                               Further Assurances.  The Loan Parties agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

 

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3.6                               Fees and Expenses.  In connection with this Amendment, (a) each Lender party hereto that returns a copy of this Amendment duly executed by such Lender prior to 5:00 p.m. EST on July 14, 2017, will receive an amendment fee of 20 basis points on such Lender’s aggregate unused Commitments, outstanding Term Loans and Revolving Exposure on the First Amendment Effective Date and (b) the Administrative Agent will receive the payment of reasonable fees and expenses of counsel to Administrative Agent incurred in connection with this Amendment.

 

3.7                               Entirety.  This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

 

3.8                               Counterparts; Telecopy.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment or any other document required to be delivered hereunder, by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.  Without limiting the foregoing, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart.

 

3.9                               GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

3.10                        Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

3.11                        Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.  The jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 9.09 and 9.10 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.

 

	
BORROWER:
    	
YETI HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard J. Shields
    
	
 
    	
Name:
    	
Richard J. Shields
    
	
 
    	
Title:
    	
Chief Financial   Officer, Principal Accounting Officer, Treasurer and Vice President of   Finance
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
ADMINISTRATIVE AGENT:
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
in its capacity as   Administrative Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kunal Shah
    
	
 
    	
Name:
    	
Kunal Shal
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
LENDERS:
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
in its capacity as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Garrett O’Malley
    
	
 
    	
Name:
    	
Garrett O’Malley
    
	
 
    	
Title:
    	
Managing Director
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
KeyBank National Association,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Marianne T. Meil
    
	
 
    	
Name:
    	
Marianne T. Meil
    
	
 
    	
Title:
    	
Senior Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
Wells Fargo Bank, N.A.,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Luke Harbinson
    
	
 
    	
Name:
    	
 Luke Harbinson
    
	
 
    	
Title:
    	
Director
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
Cadence Bank, N.A.,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Emily Northcutt
    
	
 
    	
Name: 
    	
Emily Northcutt
    
	
 
    	
Title: 
    	
Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
Woodforest National Bank,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Jacob McGee
    
	
 
    	
Name: 
    	
Jacob McGee
    
	
 
    	
Title: 
    	
Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
Bear State Bank,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Kevin Couch
    
	
 
    	
Name: 
    	
Kevin Couch
    
	
 
    	
Title: 
    	
Executive Vice   President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
Trustmark National Bank,
    
	
 
    	
in its capacity as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Louise Barden
    
	
 
    	
Name: 
    	
Louise Barden
    
	
 
    	
Title: 
    	
Senior Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
Amalgamated Bank,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Jackson Eng
    
	
 
    	
Name: 
    	
Jackson Eng
    
	
 
    	
Title: 
    	
Senior Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
Camden National Bank,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ryan A. Smith
    
	
 
    	
Name:
    	
Ryan A. Smith
    
	
 
    	
Title:
    	
Senior Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
STIFEL BANK & TRUST,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Nathan L. Yocum
    
	
 
    	
Name:
    	
Nathan L. Yocum
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
ANTARES ASSETCO LP,
    
	
 
    	
By: Antares Assetco GP   LLC, its general partner in its capacity as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Dave Colla
    
	
 
    	
Name:
    	
Dave Colla
    
	
 
    	
Title:
    	
Duly Authorized   Signatory
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
NEWSTAR CP FUNDING LLC
    
	
 
    	
By: NewStar Financial, Inc., its Designated Manager,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey R. Greene
    
	
 
    	
Name:
    	
Jeffrey R. Greene
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
NEWSTAR COMMERCIAL LOAN FUNDING   2017-1 LLC
    
	
 
    	
By: NewStar Financial, Inc., its Designated Manager,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey R. Greene
    
	
 
    	
Name:
    	
Jeffrey R. Greene
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
NewStar Arlington Senior Loan   Program LLC
    
	
 
    	
By: NewStar Financial, Inc., its Designated Manager,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey R. Greene
    
	
 
    	
Name:
    	
Jeffrey R. Greene
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
NewStar   Clarendon Fund CLO LLC
    
	
 
    	
By: NewStar Financial, Inc., its Designated Manager,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey R. Greene
    
	
 
    	
Name:
    	
Jeffrey R. Greene
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
NEWSTAR COMERCIAL LOAN FUNDING   2015-1 LLC
    
	
 
    	
By: NewStar Financial, Inc., its Designated Manager,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey R. Greene
    
	
 
    	
Name:
    	
Jeffrey R. Greene
    
	
 
    	
Title:
    	
Managing Director
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
NEWSTAR COMMERCIAL LOAN FUNDING   2016-1 LLC,
    
	
 
    	
By: NewStar Financial, Inc., its Designated Manager,
    
	
 
    	
in its capacity as   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffrey R. Greene
    
	
 
    	
Name:
    	
Jeffrey R. Greene
    
	
 
    	
Title:
    	
Managing Director
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]

 

 

	
 
    	
JFIN FUND III LLC,
    
	
 
    	
By: JFIN Asset   Management LLC as Collateral Manager
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul McDonnell
    
	
 
    	
Name:
    	
Paul McDonnell
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
MASSACHUSETTS MUTUAL LIFE INSURANCE   COMPANY, as a Lender
    
	
 
    	
 
    
	
 
    	
By: JFIN ASSET   MANAGEMENT LLC, as investment manager
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Liguori
    
	
 
    	
Name:
    	
John Liguori
    
	
 
    	
Title:
    	
Managing Director
    

 

[Signature Page to Yeti First Amendment to Credit Agreement]Exhibit 10.24

 

Execution Version

 

ADVISORY AGREEMENT

 

This Advisory Agreement (this “Agreement”) is entered into as of June 15, 2012, by and between YETI Coolers, LLC, a Delaware limited liability company (together with its successors, “YETI”), and Cortec Management V, LLC, a Delaware limited liability company (“Cortec”).

 

WHEREAS, YETI is presently engaged in the business of designing, manufacturing and distributing ice chests and coolers, including water coolers and soft sided coolers for sale to sporting goods, industrial, specialty retailers and direct to consumers (collectively, the “Business”); and

 

WHEREAS, YETI for itself and its present and future Subsidiaries, has sought from Cortec, and Cortec has agreed to provide to YETI and its Subsidiaries, certain Management Advisory Services (as hereinafter defined).

 

NOW, THEREFORE, in consideration of the mutual promises and subject to the terms and conditions herein contained, and other good and valuable consideration, had and received, the receipt and sufficiency of which are hereby acknowledged, YETI and Cortec agree as follows:

 

I.                                        As used throughout this Agreement, the following terms have the following meanings:

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “controlled” have the meanings correlative thereto.

 

“Credit Agreement” means that certain Credit Agreement, dated as of June 15, 2012, among Buyer, the lenders party thereto (the “Lenders”) and Fifth Street Finance Corp., as Administrative Agent and Lead Arranger (the “Agent”).

 

“Fee” means 1% of consolidated net revenues (in accordance with GAAP) of YETI and its Subsidiaries, payable quarterly during the Term, provided that (i) the total Fee accrued does not exceed $750,000 per annum, and (ii) the payment of the Fee, and the rights of Cortec with respect thereto, shall be subject to the terms and conditions set forth in Section VI.B.

 

“GAAP” means the generally accepted accounting principles in the United States of America.

 

“Management Advisory Services” means professional and administrative advice in areas relating to the Business such as, but not limited to, finance, budgeting, tax planning, risk management, business planning, manufacturing, sales, marketing, staffing levels and acquisitions.

 

“Person” means any individual, partnership, corporation, limited liability company, trust, estate, association, unincorporated organization or other entity or association.

 

 

“Subsidiary” means any Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other Person (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“Term” means the period commencing the effective date of this Agreement and ending on the tenth (10) anniversary hereof, subject to the extension and termination provisions set forth in this Agreement.

 

II.                                   YETI hereby retains Cortec to furnish Management Advisory Services to YETI and its Subsidiaries for the Term, all on the terms and subject to the conditions set forth below.

 

III.                              Cortec shall perform Management Advisory Services at such locations as it deems appropriate. However, when Cortec deems it necessary to provide Management Advisory Services at a facility of YETI or any of its Subsidiaries, YETI shall provide or cause its Subsidiary to provide Cortec, at no cost, with suitable office space and support services.

 

IV.                               Cortec shall at all times endeavor to provide Management Advisory Services to YETI and its Subsidiaries in a timely manner with the intention of promoting and assisting the Business. Cortec shall make its personnel reasonably available to the management of YETI and its Subsidiaries for the purposes of providing Management Advisory Services and shall undertake all reasonable activities required to carry out the intentions of the parties as set forth in this Agreement.

 

V.                                    YETI shall fully cooperate, and shall cause its Subsidiaries to cooperate, with Cortec to enable Cortec to perform Management Advisory Services. Without limitation, said cooperation shall mean the supplying of all documentation requested by Cortec and providing access to necessary personnel.

 

VI.                               A.                                    Commencing with the calendar quarter ended September 30, 2012, YETI shall pay (or shall cause one or more of its Subsidiaries to pay) Cortec on or about the fifth business day of the first month of each and every calendar quarter of the Term, the Fee for Management Advisory Services rendered during the preceding quarter based on net revenues during such quarter, provided that the first Fee shall be based on net revenues between the date hereof and September 30, 2012 and shall be paid by YETI to Cortec on October 5, 2012. In addition to payment of the Fee, YETI shall reimburse (or shall cause one of its Subsidiaries to reimburse) Cortec from time to time for all reasonable and documented out-of-pocket expenses incurred by Cortec in the course of rendering Management Advisory Services pursuant to this Agreement (“Expenses”).

 

B.                                    1.                                      If any Specified Event of Default (as defined in the Credit Agreement) shall have occurred and be continuing (each such event, an “Event of Default”), or if the Company is not in compliance with the requirements of Section 3.5 of the

 

YETI Coolers Advisory Agreement

 

 

Credit Agreement, or if a payment of the Fee would result in an Event of Default, YETI shall not pay or cause to be paid the Fee in cash unless it shall have received the prior written consent of the Agent. If, as a result of the circumstances described in the foregoing sentence, YETI fails to pay or cause to be paid any portion of the Fee in cash when due and payable (such unpaid portion of the Fee, the “Deferred Fee”), then all Deferred Fees shall (i) accrue and be owing to Cortec and (ii) be paid to Cortec after the waiver or the cure of any such event or circumstance (it being understood that the $750,000 annual limitation on Fees does not apply to payments of Deferred Fees), provided that the payment of the Deferred Fees would not result in an Event of Default or otherwise be prohibited from being paid under the terms of ‘the Credit Agreement. Notwithstanding the foregoing, nothing in this Section VI.B will prevent YETI or one or more of its Subsidiaries from reimbursing Cortec for Expenses.

 

2.                                      In the event that, notwithstanding the foregoing provisions prohibiting such payment or distribution, Cortec shall have received any payment in respect of this Agreement (including as a distribution in a bankruptcy proceeding of YETI or any of its Subsidiaries) contrary to such provisions, then and in such event such payment or distribution shall be received and held in trust for the Lenders under the Credit Agreement, so long as the Credit Agreement remains in effect or YETI has any obligations under the Credit Agreement which remain unpaid, and shall be paid over or delivered to the respective Agents for application (in the case of cash) to or as collateral (in the case of non-cash property or securities) for the payment or prepayment of all indebtedness under the Credit Agreement.

 

3.                                      Cortec hereby acknowledges receipt of $1,350,000 as a closing fee paid in connection with the acquisition on the date hereof by YETI Acquisition, LLC, a Delaware limited liability company and a Subsidiary of YETI (“Buyer”), of all the issued and outstanding membership interests of YETI pursuant to the Membership Interests Purchase Agreement, dated as of May 22, 2012, by and among Buyer and the other parties thereto (the “Purchase Agreement”).

 

C.                                    Subject to any applicable limitations set forth in the Credit Agreement, Cortec may charge a transaction fee to YETI at the closing of any acquisition by YETI or a Subsidiary of another business or product line, whether in the form of an acquisition of capital stock, other equity securities or assets of any Person, in an amount not to exceed 1% of the purchase price in such transaction. Upon the closing of any such acquisition, YETI shall cause any direct or indirect non-foreign subsidiary of YETI acquired or formed in connection with such acquisition to join in and agree to be bound by this Agreement as if it were an entity that signed this Agreement as an original signatory. For purposes of this Section VI.C.:

 

1.                                      in the case of any transaction (including a merger or consolidation) relating to the direct or indirect acquisition of stock of any Person, the purchase price in such transaction shall be deemed to be the sum of (i) the total value of all outstanding equity securities of the acquired Person plus (ii) the total principal

 

 

YETI Coolers Advisory Agreement amount of all debt of the acquired Person (including without limitation any debt incurred in connection with such transaction), in each case determined after giving effect to such transaction; and

 

2.                                      in the case of any transaction relating to the direct or indirect acquisition of assets of any Person, the purchase price in such transaction shall be deemed to be the total consideration paid or payable for the net assets acquired, plus the total principal amount of any debt assumed in connection with the acquisition or incurred in connection therewith (other than to fund the purchase price for the net assets acquired).

 

VII.                          A.                                    YETI shall, and shall cause each of its Subsidiaries to, to the fullest extent permitted by the General Corporation Law of the State of Delaware or any other  applicable laws as presently or hereinafter in effect, protect, indemnity, defend and save harmless Cortec and its employees, members, managers, officers, agents, affiliates and Subsidiaries (any such person, a “Responsible Person”), or such person’s heir, successor or administrator, from and against all losses, judgments, fines, amounts paid in settlement (provided YETI shall have consented to such settlement, which consent shall not be unreasonably withheld or delayed by it), liabilities, obligations, claims, damages, penalties (whether civil, criminal or other), causes of action, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) and costs of investigation (including, without limitation, any interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing incurred by such Responsible Person) (collectively, “Liabilities”) imposed upon or incurred by or asserted against any Responsible Person whether in connection with any action or proceeding, whether civil, at law, in equity, criminal, administrative, investigative or otherwise, including any action by or in the right of YETI, or otherwise (collectively, a “Claim”) arising out of, associated with or related to (1) this Agreement, (2) the provision of Management Advisory Services, or (3) the performance of any other services for or on behalf of YETI or any of its Subsidiaries, in each case (x) whether in such Responsible Person’s capacity as a current or former director or officer of YETI or in such Responsible Person’s capacity as a director or officer of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise at the request or YETI and (y) whether or not in an advisory capacity and including representing YETI or any of its Subsidiaries in dealings with third parties, in each case whether arising or accruing during or after the Term, including without limitation Liabilities arising out of any accident, injury to or death of any person or persons or loss of or damage to property and Liabilities based upon claims of malfeasance, misfeasance or nonfeasance; provided, that the person seeking indemnification acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of YETI (any such Claim, an “Indemnifiable Claim”).

 

B.                                    If a Responsible Person is entitled under this Section VII to indemnification by YETI for a portion of any Liabilities, but not for the total amount thereof, YETI shall nevertheless indemnify such Responsible Person for the portion thereof to which such Responsible Person is entitled. For purposes of this Section VII, any director of a direct or indirect wholly-owned subsidiary of YETI is deemed to be serving in that capacity at

 

 

the request of YETI. Any person entitled to indemnification pursuant to this Section VII is hereinafter referred to as an “Indemnified Person”).

 

C.                                    All expenses reasonably incurred by a Responsible Person in connection with a threatened or actual Claim with respect to which such Responsible Person is or may be entitled to indemnification under this Section VII must be advanced or promptly reimbursed by YETI to him or her in advance of the final disposition of such Claim, upon receipt of an undertaking by such Responsible Person or on his or her behalf to repay the amount of such advances (without interest), if any, as to which such Responsible Person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent such advances exceed the indemnification to which such Responsible Person is entitled.

 

D.                                    The indemnification provided by this Section VII is in addition to any other rights to which any Responsible Person may be entitled. Notwithstanding any different standard of conduct set forth in the organizational documents of YETI or in any other agreement with YETI, a Responsible Person is entitled to the standard of conduct providing the highest degree of protection to such Responsible Person. YETI is authorized to enter into agreements with any such person or persons providing them rights to indemnification or advancement of expenses in addition to the provisions therefor in this Section VII to the fullest extent permitted by the laws of the State of Delaware or any other applicable laws as presently or hereafter in effect.

 

E.                                     In the event that any Indemnified Person entitled to indemnification, advancement of expenses and/or insurance provided by YETI or any of its Subsidiaries (each a “YETI Indemnitor”) pursuant to its certificate of incorporation or by-laws or any separate agreement of indemnification also has rights to indemnification, advancement of expenses and/or insurance provided by Cortec, Cortec Group Fund V, L.P. or any other affiliate of Cortec (any of the foregoing being a “Secondary Indemnitor”), then as between the YETI Indemnitor and the Secondary Indemnitor the following shall apply: The YETI Indemnitor (i) shall be the indemnitor of first resort (i.e. its obligations to the Indemnified Person shall be primary and any obligation of the Secondary Indemnitor to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Indemnified Person shall be secondary); (ii) shall be required to advance the full amount of expenses incurred by the Indemnified Person and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of the certificate of incorporation, by-laws or indemnification agreement of the YETI Indemnitor, without regard to any rights the Indemnified Person may have against the Secondary Indemnitor; and (iii) shall irrevocably waive, relinquish and release the Secondary Indemnitor from any and all claims it may have against the Secondary Indemnitor for contribution, subrogation or any other recovery of any kind in respect of its indemnification of and advancement of expenses to the Indemnified Person. No advancement or payment by the Secondary Indemnitor to or on behalf of an Indemnified Person with respect to any claim for which the Indemnified Person has sought or may seek indemnification from the YETI Indemnitor shall affect the foregoing and the Secondary Indemnitor shall, to the extent of such advancement or payment, have a right of contribution from the YETI Indemnitor

 

 

and/or a right of subrogation to all rights of recovery of the Indemnified Person against the YETI Indemnitor. Each Secondary Indemnitor shall be an express third party beneficiary of this Section VII.

 

VIII.                     Unless written notice of non-renewal is delivered by either Cortec or YETI not less than ninety (90) or more than one hundred and twenty (120) days before the expiration of the then existing Term, this Agreement will be automatically renewed for additional periods of one year each.

 

IX.                               This Agreement may be terminated by Cortec at any time or by YETI for “cause” upon thirty days written notice of the intention to terminate. For the purposes of this Agreement, “cause” means and is limited to the material breach by Cortec in performing its obligations as set forth in this Agreement and failure of Cortec to cure such breach.

 

A.                                    If YETI intends to terminate this Agreement for cause, it shall deliver to Cortec a written notice of intention to terminate which shall contain ( 1) a notice that the Agreement will be terminated for cause, (2) a detailed description of the material breach alleged to have been committed, and (3) a notice that said termination shall be effective thirty (30) days after it is received by Cortec unless within said thirty (30) days Cortec remedies the breach or in the case of a breach that cannot in good faith be remedied within said period, Cortec institutes good faith measures to remedy said breach.

 

B.                                    Upon termination of this Agreement pursuant to this Section IX, YETI shall have no further liability to Cortec for payment of the Fee or reimbursement of expenses, except for the Fee accrued to the date of termination for services rendered up to that date and for expenses incurred prior to the date of termination, but the rights of Cortec under Section VI and the rights of the Indemnified Persons and Secondary Indemnitors under Section VII shall survive such termination.

 

X.                                    All notices, requests, demands and other communications hereunder shall be in writing, sent by certified mail (return receipt requested), messenger or other private delivery service and shall be effective when actually delivered to the addressee at the following addresses (or at such other address as shall be given in writing by either party to the other):

 

	
To YETI 
    	
YETI Coolers, LLC
    
	
 
    	
c/o Cortec Group Fund V, L.P.
    
	
 
    	
200 Park Avenue
    
	
 
    	
New York, New York 10166
    
	
 
    	
Attention: David L. Schnadig
    
	
 
    	
 
    
	
 
    	
with a copy to:
    
	
 
    	
 
    
	
 
    	
Cortec Management V, LLC
    
	
 
    	
200 Park Avenue
    
	
 
    	
New York, New York 10166
    
	
 
    	
Attention: Managing Member
    

 

 

	
To Cortec
    	
Cortec Management V, LLC
    
	
 
    	
200 Park Avenue
    
	
 
    	
New York, New York 10166
    
	
 
    	
Attention: David L. Schnadig
    

 

XI.                               This Agreement and each and every agreement, covenant, term and condition contained herein shall be binding upon and inure to the benefit of the respective successors. Except as set forth in this Agreement, no right, duty, obligation or interest arising hereunder may be assigned, delegated or transferred without the prior written consent of the other party, provided that Cortec may assign and delegate its rights and obligations under this Agreement to any other entity controlling, controlled by or under common control with Cortec. This Agreement shall be binding upon the respective permitted successors and assigns of the parties hereto.

 

XII.                          The illegality or unenforceability of any clause or provision of this Agreement under any present or future laws, shall not affect the validity of the remainder of this Agreement.

 

XIII.                     This Agreement shall be governed by and construed in accordance with the substantive and procedural laws of the State of New York. Any disputes arising out of this Agreement shall be resolved in the courts of the State of New York or of the United States, in each case sitting in New York County. The parties agree that service of process by certified mail, return receipt requested, shall be valid and legal process, sufficient to subject the recipient to the jurisdiction of the courts specified herein.

 

XIV.                      This Agreement contains the entire agreement between Cortec and YETI and supersedes any and all prior management agreements between the parties or any of their Subsidiaries. No change or modification of this Agreement shall be valid unless in writing and signed by an authorized officer of each of YETI and Cortec; provided that no provision of Section VI may be changed or modified in a manner that adversely affects the Lenders without the consent of the Agent, which such consent shall not be unreasonably withheld, conditioned or delayed. The Lenders are third party beneficiaries of Section VI and may enforce the same as if directly a party hereto.

 

XV.                           This Agreement is intended to create an independent contractor relationship between the parties for purpose of Federal, State and local law, including without limitation, the Internal Revenue Code of 1986, as amended.

 

XVI.                      NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IN NO INSTANCE SHALL CORTEC, ITS EMPLOYEES, MEMBERS, MANAGERS, OFFICERS, AGENTS, AFFILIATES OR SUBSIDIARIES BE HELD RESPONSIBLE FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND.

 

[Signatures on the Following Page]

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered on the day and year first above written.

 

	
 
    	
CORTEC MANAGEMENT V, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David L. Schnadig
    
	
 
    	
 
    	
Name:
    	
David L. Schnadig
    
	
 
    	
 
    	
Title:
    	
Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
YETI COOLERS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James W. Tucker
    
	
 
    	
 
    	
Name:
    	
James W. Tucker
    
	
 
    	
 
    	
Title:
    	
Assistant Secretary

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