Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
     This First Amendment to Credit Agreement (this “First Amendment”) dated as
of August 27, 2010 is entered into among:
     QUIKSILVER AMERICAS, INC., a California corporation (the “Lead Borrower”);
     QUIKSILVER CANADA CORP., a Nova Scotia unlimited liability company (the
“Canadian Borrower”),
     the Persons named on Schedule 1.01 hereto (collectively, with the Lead
Borrower, the “Domestic Borrowers”);
     QUIKSILVER, INC., a Delaware corporation (the “Parent”);
     the Persons named on Schedule 1.02 hereto (collectively, the “Guarantors”);
     the Lenders party hereto;
     BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C
Issuer;
     BANK OF AMERICA, N.A. (acting through its Canada branch), as Canadian
Agent, Swing Line Lender and L/C Issuer; and
     BANK OF AMERICA, N.A. and GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Collateral Agents;

    in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

WITNESSETH:
     Reference is made to that certain Credit Agreement dated as of July 31,
2009 (as amended, modified, supplemented or restated and in effect from time to
time, the “Credit Agreement”) by and among (i) Quiksilver Americas, Inc., as the
Lead Borrower for itself and the other Borrowers party thereto, (ii) such other
Borrowers, (iii) Quiksilver Canada Corp., as the Canadian Borrower, (iv) the
Guarantors party thereto, (v) the Administrative Agent, (vi) the Co-Collateral
Agents and (vii) the Lenders party thereto.
     The Borrowers have requested that certain modifications be made to the
Credit Agreement to, among other things, reduce the Aggregate Total Commitments
and pricing. The Lenders have agreed to such modifications on the terms set
forth herein.
     NOW, THEREFORE, in consideration of the mutual agreements herein contained
and benefits to be derived herefrom, the parties hereto agree as follows:

1.   Definitions. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.

2.   Amendment to Title Page. The reference to Joint Lead Arrangers and Joint
Bookrunners on the title page of the Credit Agreement shall mean and refer
solely to Banc of America Securities LLC as Sole Lead Arranger and Sole
Bookrunner.

1

--------------------------------------------------------------------------------

 

3.   Amendments to Article I. The provisions of Article I of the Credit
Agreement are hereby amended as follows:

  a.   The following definitions are hereby added to Article I in appropriate
alphabetical order:         “Additional Borrowing Base Reserve” means a Reserve
with respect to the Domestic Borrowing Base in the amount of the then
outstanding principal amount of term loans under the US Term Loan Credit
Agreement to the extent such term loan has not been repaid, refinanced or
otherwise satisfied 90 days prior to its scheduled maturity date.         “First
Amendment Effective Date” means August 27, 2010.     b.   The definition of
“Accelerated Borrowing Base Delivery Event” is hereby deleted in its entirety
and the following substituted in its stead:         “Accelerated Borrowing Base
Delivery Event” means either (i) the occurrence and continuance of any Event of
Default, or (ii) the failure of the Borrowers to maintain Domestic Availability
at least equal to the greater of (x) fifteen percent (15%) of the Total Loan Cap
or (y) $15,000,000. For purposes of this Agreement, the occurrence of an
Accelerated Borrowing Base Delivery Event shall be deemed continuing (i) so long
as such Event of Default is continuing, and/or (ii) if the Accelerated Borrowing
Base Delivery Event arises as a result of the Domestic Borrowers’ failure to
maintain Domestic Availability as required in clause (ii) of the immediately
preceding sentence, until Domestic Availability has equaled or exceeded the
greater of (x) fifteen percent (15%) of the Total Loan Cap or (y) $15,000,000,
for sixty (60) consecutive calendar days, in which case an Accelerated Borrowing
Base Delivery Event shall no longer be deemed to be continuing for purposes of
this Agreement.     c.   The definition of “Adjustment Date” is hereby amended
by the addition of the following at the end thereof:         The first
Adjustment Date after the First Amendment Effective Date shall be February 1,
2011.     d.   The definition of “Aggregate Domestic Commitments” is hereby
amended by deleting the last sentence of such definition and substituting the
following in its stead:         As of the First Amendment Effective Date, the
Aggregate Domestic Commitments are $135,000,000.     e.   The definition of
“Aggregate Total Commitments” is hereby amended by deleting the last sentence of
such definition and substituting the following in its stead:         As of the
First Amendment Effective Date, the Aggregate Total Commitments are
$150,000,000.     f.   The definition of “Applicable Margin” is hereby deleted
in its entirety and the following substituted in its stead:         “Applicable
Margin” means:

2

--------------------------------------------------------------------------------

 

          From and after the First Amendment Effective Date until the first
Adjustment Date after the First Amendment Effective Date, the percentages set
forth in Level II of the pricing grid below, unless the Average Daily Domestic
Availability requirements for Level II (or lower) have not been satisfied, in
which event the Applicable Margin shall be set at Level III. In no event shall
the Applicable Margin be set at Level I prior to the first Adjustment Date (even
if the Average Daily Domestic Availability requirements for Level I have been
satisfied); and
          From and after the first Adjustment Date, the Applicable Margin shall
be determined from the following pricing grid based upon the Average Daily
Domestic Availability for the most recent Fiscal Quarter ended immediately
preceding such Adjustment Date; provided however, that notwithstanding anything
to the contrary set forth herein, upon the occurrence of an Event of Default,
any Agent may, and the Administrative Agent shall at the direction of the
Required Lenders, immediately increase the Applicable Margin to the percentage
set forth in Level III which shall apply for so long as such Event of Default is
continuing (even if the Average Daily Domestic Availability requirements for a
different Level have been met and without limiting the right of the
Administrative Agent or the Required Lenders to charge interest at the Default
Rate as provided in Section 2.08(b)); provided further that, if any Borrowing
Base Certificate is at any time restated or otherwise revised (including as a
result of an audit) or if the information set forth in any such Borrowing Base
Certificate otherwise proves to be false or incorrect such that the Applicable
Margin would have been higher than was otherwise in effect during any period,
without constituting a waiver of any Default or Event of Default arising as a
result thereof, interest due under this Agreement shall be immediately and
retroactively recalculated at such higher rate for any applicable periods and
shall be due and payable (to the extent not already paid) on demand.

                                          Average Daily Domestic   LIBOR  
Domestic Prime   Canadian Prime   BA Rate Level   Availability   Margin   Rate
Margin   Rate Margin   Margin I  
Equal to or greater than 66%
of the Total Loan Cap
    2.50 %     1.50 %     2.00 %     2.50 % II  
Less than 66%, but equal to or
greater than 33%, of the Total
Loan Cap
    2.75 %     1.75 %     2.25 %     2.75 % III  
Less than 33% of the Total
Loan Cap
    3.00 %     2.00 %     2.50 %     3.00 %

  g.   The definition of “Applicable Rate” is hereby deleted in its entirety and
the following substituted in its stead:         “Applicable Rate” means,
(i) with respect to Commercial Letters of Credit, at any time of calculation, a
per annum rate equal to the Applicable Margin for Loans which are LIBO Rate
Loans minus 0.50%, and (ii) with respect to Standby Letters of Credit, at any
time of calculation, a per annum rate equal to the Applicable Margin for Loans
which are LIBO Rate Loans.

3

--------------------------------------------------------------------------------

 

  h.   The definition of “Appraisal Percentage” is hereby deleted in its
entirety and the following substituted in its stead:         “Appraisal
Percentage” means ninety percent (90%).     i.   The definition of “Arrangers”
is hereby deleted in its entirety and the following substituted in its stead:  
      “Arrangers” means Banc of America Securities LLC, in its capacity as sole
lead arranger. All references to the “Arrangers” shall mean and refer to the
“Arranger”.     j.   The definition of “Availability Condition” is hereby
deleted in its entirety and the following substituted in its stead:        
“Availability Condition” means at the time of determination with respect to any
specified transaction or payment, Domestic Availability immediately preceding,
and on a pro forma basis on the date thereof and a projected basis for the
twelve (12) months immediately following, such transaction or payment was, and
is projected to be, equal to or greater than the greater of (a) twenty percent
(20%) of the Total Loan Cap and (b) $20,000,000.     k.   The definition of
“Availability Reserves” is hereby amended by the addition of the following text
in the fifth to last line, immediately after the text “(x) Dilution Reserves”:  
      and (xi) Additional Borrowing Base Reserve.     l.   The definition of
“Cash Dominion Event” is hereby deleted in its entirety and the following
substituted in its stead:         “Cash Dominion Event” means either (i) the
occurrence and continuance of any Event of Default, or (ii) the failure of the
Borrowers to maintain Domestic Availability for three (3) consecutive Business
Days at least equal to the greater of (x) fifteen percent (15%) of the Total
Loan Cap or (y) $15,000,000. For purposes of this Agreement, the occurrence of a
Cash Dominion Event shall be deemed continuing (i) so long as such Event of
Default is continuing, and/or (ii) if such Cash Dominion Event arises as a
result of the Borrowers’ failure to maintain Domestic Availability as required
under clause (ii) of the immediately preceding sentence, until Domestic
Availability is at least equal to the greater of (x) fifteen percent (15%) of
the Total Loan Cap or (y) $15,000,000 for sixty (60) consecutive calendar days;
in which case a Cash Dominion Event shall no longer be deemed to be continuing
for purposes of this Agreement; provided that a Cash Dominion Event shall be
deemed continuing (even if an Event of Default is no longer continuing and/or
Domestic Availability exceeds the required amount for sixty (60) consecutive
calendar days) at all times after a Cash Dominion Event has occurred and been
discontinued on three (3) occasions after the Closing Date.     m.   The
definition of “Change in Law” is hereby amended by the addition of the following
text at the end thereof:         A Change in Law shall not include the
application or effect of any regulations promulgated and any interpretation or
other guidance issued in connection with Sections 1471 or 1472 of the Code.

4

--------------------------------------------------------------------------------

 

  n.   The definition of “Covenant Compliance Event” is hereby deleted in its
entirety and the following substituted in its stead:         “Covenant
Compliance Event” means, as of any date, Domestic Availability at any time is
less than the greater of (x) fifteen percent (15%) of the Total Loan Cap or (y)
$15,000,000. For purposes hereof, the occurrence of a Covenant Compliance Event
shall be deemed continuing until Domestic Availability is at least equal to the
greater of (x) fifteen percent (15%) of the Total Loan Cap or (y) $15,000,000
for sixty (60) consecutive calendar days, in which case a Covenant Compliance
Event shall no longer be deemed to be continuing for purposes of this Agreement.
    o.   The definition of “Credit Card Advance Rate” is hereby deleted in its
entirety and the following substituted in its stead:         “Credit Card
Advance Rate” means ninety percent (90%).     p.   The following text contained
in the definition of “Eligible Assignee” is hereby deleted in its entirety:    
    provided that notwithstanding the foregoing, “Eligible Assignee” shall not
include the Parent or any of its Subsidiaries or other Affiliates, or the US
Term Loan Agent or the Euro Term Loan Agent, or any of their respective Lender
Affiliates or Subsidiaries except in connection with the exercise of the
purchase right, as set forth in Section 5.4 of the Intercreditor Agreement      
  and the following substituted in its stead:         provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the Parent
or any of its Subsidiaries or other Affiliates, or the US Term Loan Agent or the
Euro Term Loan Agent, or any of their respective Lender Affiliates or
Subsidiaries (except to the extent that the US Term Loan Agent or the Euro Term
Loan Agent is Bank of America, N.A. in connection with any Permitted
Amendment/Refinancing and except in connection with the exercise of the purchase
right, as set forth in Section 5.4 of the Intercreditor Agreement)     q.   The
definition of “Excluded Taxes” is hereby amended by deleting the “.” at the end
of such definition and inserting the following in its stead:         , and
(e) any tax that is attributable to any Lender’s failure or inability to take
any action (including entering into an agreement with the IRS), comply with any
information gathering or reporting requirements, or to provide the Lead Borrower
(with a copy to the Administrative Agent) with appropriate certification, in
each case, if such compliance or certificate is required to obtain exemption
from any United States federal withholding taxes under Sections 1471 or 1472 of
the Code and any regulations promulgated thereunder and any interpretation or
other guidance issued in connection therewith.     r.   The definition of “Fee
Letter” is hereby amended by the addition of the following text at the end
thereof:

5

--------------------------------------------------------------------------------

 

      As of the First Amendment Effective Date, “Fee Letter” means the letter
agreement, dated August 11, 2010, among the Lead Borrower, the Parent, the
Administrative Agent and the Arranger.     s.   The definition of “LIBO Rate” is
hereby amended by the deletion of the following text contained in such
definition:         , provided that there shall be a two percent (2%) floor on
the LIBO Rate for LIBO Rate Loans with a one (1) or two (2) month Interest
Period, and provided further that LIBO Rate Loans may be requested by the Lead
Borrower or the Canadian Borrower at the three (3) month LIBO Rate for one
(1) or two (2) month Interest Periods     t.   The definition of “Maturity Date”
is hereby deleted in its entirety and the following substituted in its stead:  
      “Maturity Date” means August 27, 2014.     u.   The definition of “Payment
Conditions” is hereby deleted in its entirety and the following substituted in
its stead:         “Payment Conditions” means, at the time of determination with
respect to any specified transaction or payment, that (a) no Default or Event of
Default then exists or would arise as a result of entering into such transaction
or the making such payment, and (b) the Availability Condition has been
satisfied, and (c) the Consolidated Fixed Charge Coverage Ratio, calculated for
the Measurement Period most recently ended for which financial statements have
been (or were required to be) delivered pursuant to Section 6.01 is (x) with
respect to any Restricted Payment, equal to or greater than 1.15:1.0,
immediately preceding, and on a pro forma basis on the date thereof, after
giving effect to such dividend or repurchase and (y) with respect to any
Investments or Acquisitions or any voluntary prepayments, repurchases,
redemptions or defeasances of Permitted Indebtedness (other than Subordinated
Indebtedness), equal to or greater than 1.1:1.0, in each case, immediately
preceding, and on a pro forma basis on the date thereof, after giving effect to
such transaction or payment. Prior to undertaking any transaction or payment
which is subject to the Payment Conditions, the Lead Borrower shall deliver to
the Administrative Agent evidence of satisfaction of the conditions contained in
clauses (b) and (c) in the preceding sentence on a basis (including, without
limitation, giving due consideration to results for prior periods) reasonably
satisfactory to the Agents. For all calculations of the Consolidated Fixed
Charge Coverage Ratio during the first year following the First Amendment
Effective Date, Consolidated Interest Charges relating to the Term Loans shall
be calculated based on the amount of cash interest that would have been expended
had the Term Loans been at a $30,000,000 principal balance for the applicable
Measurement Period or, if less, the actual principal amount of Term Loans
outstanding during such Measurement Period or any portion thereof.     v.   The
definition of “Permitted Amendment/Refinancing” is hereby deleted in its
entirety and the following substituted in its stead:         “Permitted
Amendment/Refinancing” means, in respect of any Indebtedness, any amendments,
restatements, refinancings, refundings, renewals, extensions or replacements of
such Indebtedness; provided that (i) the principal amount of such Indebtedness
is not increased at the time of such amendment, restatement, refinancing,

6

--------------------------------------------------------------------------------

 

      refunding, renewal, extension or replacement except by an amount equal to
any premium or other amount paid, interest then due, and fees and expenses
incurred, in connection with such amendment, restatement, refinancing,
refunding, renewal, extension or replacement and by an amount equal to any
existing commitments unutilized thereunder, (ii) the result of such amendment,
restatement, refinancing, refunding, renewal, extension or replacement shall not
be an earlier maturity date or decreased weighted average life of such
Indebtedness, and (iii) the terms relating to collateral (if any) and
subordination (if any), financial covenants, mandatory prepayments, events of
default, and interest, fees and other amounts payable, of any such amended,
restated, refinanced, refunded, renewed, extended or replacement Indebtedness,
and of any agreement entered into and of any instrument issued in connection
therewith, are not materially less favorable, when taken as a whole, to the Loan
Parties or the Lenders than the terms of the agreements and instruments
governing the Indebtedness being so amended, restated, refinanced, refunded,
renewed, extended or replaced; provided that (A) the interest rates in effect on
the Term Loans may be increased by a spread of no more than four percent (4%)
per annum in the aggregate above the interest rates applicable to the Term Loans
in effect as of the Closing Date (excluding fluctuations in underlying rate
indices and increases resulting from the accrual of interest at the default
rate), of which no more than two percent (2%) per annum shall be cash pay, and
the balance (to the extent applicable) shall be capitalized and paid at or after
the initial maturity of the Term Loans, and (B) the foregoing shall not prevent
any payment in the form of equity securities (not constituting Indebtedness) in
consideration of any such amendment, restatement, refinancing, refunding,
renewal, extension or replacement. Notwithstanding anything to the contrary
contained herein, Indebtedness under a credit agreement to be entered into among
Bank of America, N.A., as administrative agent on behalf of certain lenders,
certain lenders party thereto and certain of the Loan Parties, substantially in
accordance with the terms of a certain Summary of Indicative Terms and
Conditions dated as of August 12, 2010, the net proceeds of which are used,
directly or indirectly, to repay in full the outstanding Term Loans, shall be
deemed a Permitted Amendment/Refinancing for all purposes hereunder.     w.  
The definition of “Permitted Investment” is hereby amended by inserting the
following immediately after clause (v) contained therein and immediately prior
to the proviso at the end of such definition:       (w) subject to the
restrictions set forth in Section 7.07, the payment or other satisfaction by the
Loan Parties of Indebtedness owing by Mountain & Wave S.à r.l. under the Euro
Term Loan Credit Agreement and any Investment by any Loan Party made to effect
the payment or other satisfaction of Indebtedness owing by Mountain & Wave S.à
r.l. under the Euro Term Loan Credit Agreement;

4.   Amendments to Article II. The provisions of Article II of the Credit
Agreement are hereby amended as follows:

  a.   As of the First Amendment Effective Date the grid in Section 2.09(a)(i)
is hereby deleted in its entirety and the following substituted in its stead:

          Average Daily Total Domestic     Outstandings   Domestic Commitment
Fee
Less than 50% of Aggregate Domestic Commitments
    0.50 %

7

--------------------------------------------------------------------------------

 

          Average Daily Total Domestic     Outstandings   Domestic Commitment
Fee
Greater than or equal to 50% of Aggregate Domestic Commitments
    0.375 %

  b.   As of the First Amendment Effective Date the grid in Section 2.09(a)(ii)
is hereby deleted in its entirety and the following substituted in its stead:

          Average Daily Total Canadian     Outstandings   Canadian Commitment
Fee
Less than 50% of Aggregate Canadian Commitments
    0.50 %
Greater than or equal to 50% of Aggregate Canadian Commitments
    0.375 %

       

  c.   The provisions of Section 2.15 are hereby amended as follows:

  i.   The provisions of Section 2.15(a) of the Credit Agreement are hereby
amended by deleting the number “$50,000,000” appearing therein and substituting
the number “$100,000,000” in its stead and by deleting the number “$10,000,000”
appearing therein and substituting the number “$15,000,000” in its stead.    
ii.   Section 2.15(b) of the Credit Agreement is hereby deleted in its entirety
and the following substituted in its stead:

          (b)Lender Elections to Increase. Each Lender agreeing to increase its
Commitment is defined herein as an “Existing Increasing Lender.

    iii.   Section 2.15(c) of the Credit Agreement is hereby deleted in its
entirety and the following substituted in its stead:

          (c) Notification by Administrative Agent; Additional Commitment
Lenders. The Administrative Agent, in consultation with the Lead Borrower, will
use its reasonable efforts to arrange for Eligible Assignees to become a
Domestic Lender or Canadian Lender, as applicable, hereunder and to issue
commitments in an amount equal to the amount of the increase in the Aggregate
Total Commitments requested by the Lead Borrower (each such Eligible Assignee
issuing a commitment and becoming a Lender, an “Additional Commitment Lender”),
provided, however, that without the consent of the Administrative Agent, at no
time shall the Commitment of any Additional Commitment Lender be less than
$10,000,000.

5.   Amendments to Article III. The provisions of Article III of the Credit
Agreement are hereby amended as follows:

  a.   The provisions of Section 3.01 of the Credit Agreement are hereby amended
by inserting the following at the end of such Section:         Each Lender shall
promptly provide, upon reasonable request from the Lead Borrower or the
Administrative Agent, any additional information that the Lead Borrower or the
Administrative Agent needs in order for the Lead Borrower or the Administrative
Agent

8

--------------------------------------------------------------------------------

 

      to determine the amount of any applicable withholding taxes, including
information relating to compliance with Sections 1471 or 1472 of the Code and
any regulations promulgated thereunder and any interpretation or other guidance
issued in connection therewith.

6.   Amendments to Article VI. The provisions of Article VI of the Credit
Agreement are hereby amended as follows:

  a.   The provisions of Section 6.02(c) of the Credit Agreement are hereby
amended by deleting the text “tenth (10th)” appearing therein and substituting
the text “fifteenth (15th)” in its stead.     b.   The provisions of
Section 6.10(b) of the Credit Agreement are hereby amended by deleting the text
“thirty percent (30%)” appearing therein and substituting the text “twenty-five
percent (25%)” in its stead and by deleting the number “$45,000,000” appearing
therein and substituting the number “$25,000,000” in its stead.     c.  
Section 6.13(f) of the Credit Agreement is hereby deleted in its entirety.

7.   Amendments to Article VII. The provisions of Article VII of the Credit
Agreement are hereby amended as follows:

  a.   Section 7.07 of the Credit Agreement is hereby amended by deleting the
“.” at the end of such Section and inserting the following in its stead:        
, and (f) the Loan Parties may prepay (and may make Investments in any
Subsidiary to effect prepayment of) up to an aggregate amount of $30,000,000 of
the principal amount outstanding under the Term Loans (together with accrued
interest thereon) with the use of cash on hand (but not, for the avoidance of
doubt, with the proceeds of a Borrowing), regardless of whether the Payment
Conditions have been satisfied; provided that at the time of determination with
respect to any such prepayment of the Term Loans (i) no Default or Event of
Default then exists or would arise as a result of the making of any such payment
and (ii) the Availability Condition is satisfied and evidence thereof reasonably
satisfactory to the Agents has been delivered to the Administrative Agent.    
b.   Section 7.15(a) of the Credit Agreement is hereby amended by the addition
of the following text at the end thereof:         For all calculations of the
Consolidated Fixed Charge Coverage Ratio during the first year following the
First Amendment Effective Date, Consolidated Interest Charges relating to the
Term Loans shall be calculated based on the amount of cash interest that would
have been expended had the Term Loans been at a $30,000,000 principal balance
for the applicable Measurement Period or, if less, the actual principal amount
of Term Loans outstanding during such Measurement Period or any portion thereof.
    c.   Section 7.15(b) of the Credit Agreement is hereby deleted in its
entirety.

8.   Amendment to Schedules. Schedule 2.01 to the Credit Agreement is hereby
deleted in its entirety and a new Schedule 2.01 in the form annexed hereto
substituted in its stead.

9

--------------------------------------------------------------------------------

 

9.   Commitment Reduction. On the First Amendment Effective Date, in accordance
with Section 2.06 of the Credit Agreement, the Aggregate Domestic Commitments
shall be reduced to $135,000,000 and any payments required to be made to the
Domestic Lenders under such Section 2.06 shall be paid by the Domestic
Borrowers. The Lenders waive the requirement contained in said Section 2.06 that
at least three Business Days prior written notice of such reduction be furnished
to the Administrative Agent.

10.   Conditions to Effectiveness. This First Amendment shall become effective
upon satisfaction of each of the following conditions precedent:

  a.   This First Amendment shall have been duly executed and delivered by the
Loan Parties, the Agents and all of the Lenders, and the Administrative Agent
shall have received a fully executed copy hereof.     b.   The Administrative
Agent shall have received reasonable and customary opinions of counsel to the
Borrowers and Guarantors, and evidence that all requisite corporate and other
action necessary for the valid execution, delivery and performance by the Loan
Parties of this First Amendment has been taken.     c.   The Borrowers shall
have paid to the Administrative Agent fees in accordance with the terms of the
Fee Letter.     d.   As of the First Amendment Effective Date combined Domestic
Availability and Canadian Availability shall be equal to or greater than
$40,000,000.

11.   Confirmation of Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agents and the Lenders that (a) the
representations and warranties of such Loan Party contained in Article III of
the Credit Agreement, and in each other Loan Document (after giving effect to
the amendments set forth herein) to which it is a party are true and correct in
all material respects on and as of such date as though made on and as of such
date, except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties are true and correct in all material respects on and as of such
date); (b) no Default or Event of Default has occurred and is continuing or
would result from the effectiveness of this First Amendment; and (c) no event
has occurred after July 30, 2010 that could reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), operations,
or assets of the Borrower and Guarantors, taken as a whole.

12.   Miscellaneous.

  a.   All terms and conditions of the Credit Agreement and the other Loan
Documents, as amended hereby, remain in full force and effect.     b.   The
Borrowers shall pay on demand all reasonable and documented out-of-pocket costs
and expenses of the Agents incurred in connection with the preparation,
negotiation, execution and delivery of this First Amendment, including, without
limitation, reasonable and documented fees of their counsel (limited to (i) not
more than one primary counsel and necessary local counsel (limited to one local
counsel per jurisdiction) in the case of Bank of America, N.A., and (ii) not
more than $10,000 to be paid to counsel to GECC, inclusive of the fees, charges
and disbursements).

10

--------------------------------------------------------------------------------

 

  c.   This First Amendment may be executed in several counterparts and by each
party on a separate counterpart, each of which when so executed and delivered,
shall be an original, and all of which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page hereto by telecopy or
other electronic image scan transmission (e.g., “pdf” or “tif” via e-mail) shall
be as effective as delivery of a manually executed counterpart hereof.     d.  
This First Amendment expresses the entire understanding of the parties with
respect to the matters set forth herein and supersedes all prior discussions or
negotiations hereon.     e.   Any determination that any provision of this First
Amendment or any application hereof is invalid, illegal or unenforceable in any
respect and in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality or enforceability of any other provisions of this First Amendment.    
f.   THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIATIONS LAW).

[SIGNATURE PAGES FOLLOW]

11

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed as the date first above written.

            QUIKSILVER AMERICAS, INC.,
as the Lead Borrower
      By:           Name:           Title:        

            DC SHOES, INC.,
as a Domestic Borrower
      By:           Name:           Title:        

            HAWK DESIGNS, INC.,
as a Domestic Borrower
      By:           Name:           Title:        

            MERVIN MANUFACTURING, INC.,
as a Domestic Borrower
      By:           Name:           Title:        

            QS WHOLESALE, INC.,
as a Domestic Borrower
      By:           Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

            QS RETAIL, INC.,
as a Domestic Borrower
      By:           Name:           Title:        

            QUIKSILVER, INC.,
as a Guarantor
      By:           Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

            QUIKSILVER CANADA CORP.,
as the Canadian Borrower
      By:           Name:           Title:        

            QS RETAIL CANADA CORP.,
as a Guarantor
      By:           Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

            BANK OF AMERICA, N.A., as Administrative Agent and as a
Co-Collateral Agent
      By:           Name:           Title:        

            BANK OF AMERICA, N.A. (acting through its Canada branch), as
Canadian Agent
      By:           Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

            BANK OF AMERICA, N.A., as a Domestic Lender, L/C Issuer and Swing
Line Lender
      By:           Name:           Title:        

            BANK OF AMERICA, N.A. (acting through its Canada branch), as a
Canadian Lender, L/C Issuer and Swing Line Lender
      By:           Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

            GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Collateral Agent
      By:           Name:           Title:        

            GENERAL ELECTRIC CAPITAL CORPORATION, as a Domestic Lender
      By:           Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

            GENERAL ELECTRIC CAPITAL CORPORATION, as a Canadian Lender
      By:           Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

Schedule 1.01
DOMESTIC BORROWERS

1.   Quiksilver Americas, Inc.

2.   DC Shoes, Inc.

3.   Hawk Designs, Inc.

4.   Mervin Manufacturing, Inc.

5.   QS Wholesale, Inc.

6.   QS Retail, Inc.

 

--------------------------------------------------------------------------------

 

Schedule 1.02
GUARANTORS OF OBLIGATIONS

1.   Quiksilver, Inc.

GUARANTORS OF CANADIAN LIABILITIES

2.   QS Retail Canada Corp.

 

--------------------------------------------------------------------------------

 

Schedule 2.01
Domestic Commitments and Applicable Percentages

                  Domestic Lender   Commitment   Applicable Percentage
Bank of America, N.A.
  $ 67,500,000.00       50 %
General Electric Capital Corporation
  $ 67,500,000.00       50 %
TOTAL
  $ 135,000,000.00       100 %

Canadian Commitments and Applicable Percentages

                  Canadian Lender   Commitment   Applicable Percentage
Bank of America, N.A. (acting through its Canada branch)
  $ 7,500,000.00       50 %
General Electric Capital Corporation
  $ 7,500,000.00       50 %
TOTAL
  $ 15,000,000.00       100 %