Exhibit 10.1

$70,000,000 REVOLVING CREDIT FACILITY

AMENDED AND RESTATED CREDIT AGREEMENT

by and among

CROCS, INC.

CROCS RETAIL, INC.

OCEAN MINDED, INC.

JIBBITZ LLC

BITE, INC.

and

THE LENDERS PARTY HERETO

and

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent

Dated as of December 16, 2011

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TABLE OF CONTENTS

 

                 Page   1.   CERTAIN DEFINITIONS      1      1.1   Certain
Definitions      1      1.2   Construction      25      1.3   Accounting
Principles; Changes in GAAP      26    2.   REVOLVING CREDIT AND SWING LOAN
FACILITIES      27      2.1   Revolving Credit Commitments      27        2.1.1
  Revolving Credit Loans      27        2.1.2   Swing Loan Commitment      27   
  2.2   Nature of Lenders’ Obligations with Respect to Revolving Credit Loans   
  27      2.3   Commitment Fees      27      2.4   Revolving Credit Loan
Requests; Swing Loan Requests      28        2.4.1   Revolving Credit Loan
Requests      28        2.4.2   Swing Loan Requests      28      2.5   Making
Revolving Credit Loans and Swing Loans; Presumptions by the       
Administrative Agent; Repayment of Revolving Credit Loans; Borrowings        to
Repay Swing Loans      28        2.5.1   Making Revolving Credit Loans      28
       2.5.2   Presumptions by the Administrative Agent      29        2.5.3  
Making Swing Loans      29        2.5.4   Repayment of Revolving Credit Loans   
  29        2.5.5   Borrowings to Repay Swing Loans      29        2.5.6   Swing
Loans Under Cash Management Agreements      30      2.6   Notes        30     
2.7   Use of Proceeds      30      2.8   Letter of Credit Subfacility      31   
    2.8.1   Issuance of Letters of Credit      31        2.8.2   Letter of
Credit Fees      31        2.8.3   Disbursements, Reimbursement      31       
2.8.4   Repayment of Participation Advances      33        2.8.5   Documentation
     33        2.8.6   Determinations to Honor Drawing Requests      33       
2.8.7   Nature of Participation and Reimbursement Obligations      34       
2.8.8   Indemnity      35        2.8.9   Liability for Acts and Omissions     
35        2.8.10   Issuing Lender Reporting Requirements      37      2.9  
Defaulting Lenders      37      2.10   Increase in Revolving Credit Commitments
     39        2.10.1   Increasing Lenders and New Lenders      39      2.11  
Reduction of Revolving Credit Commitment      40   

 

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3.   RESERVED    40 4.   INTEREST RATES    40   4.1   Interest Rate Options   
40     4.1.1   Revolving Credit Interest Rate Options; Swing Line Interest     
    Rate    41     4.1.2   [RESERVED]    41     4.1.3   Rate Quotations    41  
4.2   Interest Periods    41     4.2.1   Amount of Borrowing Tranche    41    
4.2.2   Renewals    41   4.3   Interest After Default    41     4.3.1   Letter
of Credit Fees, Interest Rate    41     4.3.2   Other Obligations    42    
4.3.3   Acknowledgment    42   4.4   LIBOR Rate Unascertainable; Illegality;
Increased Costs; Deposits Not        Available    42     4.4.1   Unascertainable
   42     4.4.2   Illegality; Increased Costs; Deposits Not Available    42    
4.4.3   Administrative Agent’s and Lender’s Rights    42   4.5   Selection of
Interest Rate Options    43 5.   PAYMENTS    43   5.1   Payments    43   5.2  
Pro Rata Treatment of Lenders    44   5.3   Sharing of Payments by Lenders    44
  5.4   Presumptions by Administrative Agent    45   5.5   Interest Payment
Dates    45   5.6   Voluntary Prepayments    45     5.6.1   Right to Prepay   
45     5.6.2   Replacement of a Lender    46   5.7   Mandatory Prepayments    47
    5.7.1   Sale of Assets    47     5.7.2   Application Among Interest Rate
Options    47   5.8   Increased Costs    47     5.8.1   Increased Costs
Generally    47     5.8.2   Capital Requirements    48     5.8.3   Certificates
for Reimbursement; Repayment of Outstanding          Loans; Borrowing of New
Loans    48     5.8.4   Delay in Requests    48   5.9   Taxes      48     5.9.1
  Issuing Lender    48     5.9.2   Payments Free of Taxes    48     5.9.3  
Payment of Other Taxes by the Loan Parties    49     5.9.4   Indemnification by
the Loan Parties    49     5.9.5   Indemnification by the Lenders    49    
5.9.6   Evidence of Payments    49     5.9.7   Status of Lenders    50     5.9.8
  Treatment of Certain Refunds    52

 

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        5.9.9   Survival    52   5.10   Indemnity    52   5.11   Settlement Date
Procedures    53   5.12   Mitigation Obligations    53 6.   REPRESENTATIONS AND
WARRANTIES    54   6.1   Representations and Warranties    54     6.1.1  
Organization and Qualification; Power and Authority;          Compliance With
Laws; Title to Properties; Event of Default    54     6.1.2   Subsidiaries and
Owners; Investment Companies    54     6.1.3   Validity and Binding Effect    54
    6.1.4   No Conflict; Material Agreements; Consents    55     6.1.5  
Litigation    55     6.1.6   Financial Statements    55     6.1.7   Margin Stock
   56     6.1.8   Full Disclosure    56     6.1.9   Taxes    56     6.1.10  
Patents, Trademarks, Copyrights, Licenses, Etc    56     6.1.11   Liens in the
Collateral    57     6.1.12   Insurance    57     6.1.13   ERISA Compliance   
57     6.1.14   Environmental Matters    58     6.1.15   Solvency    58   6.2  
Updates to Schedules    58 7.   CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF
CREDIT    58   7.1   First Loans and Letters of Credit    58     7.1.1  
Deliveries    58     7.1.2   Payment of Fees    59   7.2   Each Loan or Letter
of Credit    59 8.   COVENANTS    60   8.1   Affirmative Covenants    60    
8.1.1   Preservation of Existence, Etc    60     8.1.2   Payment of Liabilities,
Including Taxes, Etc    60     8.1.3   Maintenance of Insurance    60     8.1.4
  Maintenance of Properties and Leases    60     8.1.5   Visitation Rights    60
    8.1.6   Keeping of Records and Books of Account    61     8.1.7   Compliance
with Laws; Use of Proceeds    61     8.1.8   Further Assurances    61     8.1.9
  Anti-Terrorism Laws    61   8.2   Negative Covenants    61     8.2.1  
Indebtedness    61     8.2.2   Liens; Lien Covenants    63     8.2.3  
Guaranties    63     8.2.4   Loans and Investments    63     8.2.5   Dividends
and Related Distributions    64

 

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    8.2.6   Liquidations, Mergers, Consolidations, Acquisitions    65     8.2.7
  Dispositions of Assets or Subsidiaries    65     8.2.8   Affiliate
Transactions    66     8.2.9   Subsidiaries, Partnerships and Joint Ventures   
66     8.2.10   Continuation of or Change in Business    66     8.2.11   Fiscal
Year    66     8.2.12   Changes in Organizational Documents    66     8.2.13  
Capital Expenditures and Leases    67     8.2.14   Minimum Fixed Charge Coverage
Ratio    67     8.2.15   Maximum Leverage Ratio. The Loan Parties shall not at
any time          permit the Leverage Ratio to be greater than 3.00 to 1.00   
67   8.3   Reporting Requirements    67     8.3.1   Quarterly Financial
Statements    67     8.3.2   Annual Financial Statements    67     8.3.3  
Certificate of the Borrower    68     8.3.4   Notices    68 9.   DEFAULT      69
  9.1   Events of Default    69     9.1.1   Payments Under Loan Documents    69
    9.1.2   Breach of Warranty    70     9.1.3   Breach of Negative Covenants or
Visitation Rights    70     9.1.4   Breach of Other Covenants    70     9.1.5  
Defaults in Other Agreements    70     9.1.6   Final Judgments or Orders    70  
  9.1.7   Loan Document Unenforceable    70     9.1.8   Uninsured Losses;
Proceedings Against Assets    70     9.1.9   Events Relating to Plans    71    
9.1.10   Change of Control    71     9.1.11   Relief Proceedings    71   9.2  
Consequences of Event of Default    71     9.2.1   Events of Default Other Than
Bankruptcy, Insolvency or          Reorganization Proceedings    71     9.2.2  
Bankruptcy, Insolvency or Reorganization Proceedings    71     9.2.3   Set-off
   71     9.2.4   Application of Proceeds    72 10.   THE ADMINISTRATIVE AGENT
   73   10.1   Appointment and Authority    73   10.2   Rights as a Lender    73
  10.3   Exculpatory Provisions    73   10.4   Reliance by Administrative Agent
   74   10.5   Delegation of Duties    74   10.6   Resignation of Administrative
Agent    74   10.7   Non-Reliance on Administrative Agent and Other Lenders   
75   10.8   No Other Duties, etc    76   10.9   Administrative Agent’s Fee    76
  10.10   Authorization to Release Collateral and Guarantors    76   10.11   No
Reliance on Administrative Agent’s Customer Identification Program    76

 

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11.   MISCELLANEOUS    76   11.1   Joint and Several Obligations.    76   11.2  
Modifications, Amendments or Waivers.    77     11.2.1   Increase of Commitment.
   77     11.2.2   Extension of Payment; Reduction of Principal Interest or
Fees;          Modification of Terms of Payment.    77     11.2.3   Release of
Collateral or Guarantor.    78     11.2.4   Miscellaneous.    78   11.3   No
Implied Waivers; Cumulative Remedies.    78   11.4   Expenses; Indemnity; Damage
Waiver.    78     11.4.1   Costs and Expenses.    78     11.4.2  
Indemnification by the Borrower.    79     11.4.3   Reimbursement by Lenders.   
80     11.4.4   Waiver of Consequential Damages, Etc.    80     11.4.5  
Payments.    80   11.5   Holidays.    80   11.6   Notices; Effectiveness;
Electronic Communication.    81     11.6.1   Notices Generally.    81     11.6.2
  Electronic Communications.    81     11.6.3   Change of Address, Etc.    81  
11.7   Severability.    81   11.8   Duration; Survival.    82   11.9  
Successors and Assigns.    82     11.9.1   Successors and Assigns Generally.   
82     11.9.2   Assignments by Lenders.    82     11.9.3   Register.    84    
11.9.4   Participations.    84     11.9.5   Certain Pledges; Successors and
Assigns Generally.    85   11.10 Confidentiality.    85     11.10.1   General.
   85     11.10.2   Sharing Information With Affiliates of the Lenders.    86  
11.11 Counterparts; Integration; Effectiveness.    86     11.11.1  
Counterparts; Integration; Effectiveness.    86   11.12 CHOICE OF LAW;
SUBMISSION TO JURISDICTION; WAIVER OF        VENUE; SERVICE OF PROCESS; WAIVER
OF JURY TRIAL.    86     11.12.1   Governing Law    86     11.12.2   SUBMISSION
TO JURISDICTION    86     11.12.3   WAIVER OF VENUE    87     11.12.4   SERVICE
OF PROCESS    87     11.12.5   WAIVER OF JURY TRIAL    87   11.13 USA Patriot
Act Notice    88

 

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LIST OF SCHEDULES AND EXHIBITS

SCHEDULES

 

SCHEDULE 1.1(A)   -    PRICING GRID / COMMITMENT FEE GRID SCHEDULE 1.1(B)   -   
COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES SCHEDULE 1.1(P)   -   
PERMITTED LIENS SCHEDULE 6.1.1   -    QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.2   -    SUBSIDIARIES SCHEDULE 6.1.14   -    ENVIRONMENTAL
DISCLOSURES SCHEDULE 8.1.3   -    INSURANCE REQUIREMENTS RELATING TO COLLATERAL
SCHEDULE 8.2.1   -    PERMITTED INDEBTEDNESS SCHEDULE 8.2.4      LOANS AND
INVESTMENTS

EXHIBITS

 

EXHIBIT 1.1(A)   -    ASSIGNMENT AND ASSUMPTION AGREEMENT EXHIBIT 1.1(N)(1)   -
   REVOLVING CREDIT NOTE EXHIBIT 1.1(N)(2)   -    SWING LOAN NOTE EXHIBIT 2.4.1
  -    LOAN REQUEST EXHIBIT 2.4.2   -    SWING LOAN REQUEST EXHIBIT 5.9.7(A)   -
   U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Not
Partnerships For U.S. Federal Income Tax Purposes) EXHIBIT 5.9.7(B)   -    U.S.
TAX COMPLIANCE CERTIFICATE (For Foreign Participants That Are Not Partnerships
For U.S. Federal Income Tax Purposes) EXHIBIT 5.9.7(C)   -    U.S. TAX
COMPLIANCE CERTIFICATE (For Foreign Participants That Are Partnerships For U.S.
Federal Income Tax Purposes) EXHIBIT 5.9.7(D)   -    U.S. TAX COMPLIANCE
CERTIFICATE (For Foreign Lenders That Are Partnerships For U.S. Federal Income
Tax Purposes) EXHIBIT 8.3.3   -    QUARTERLY COMPLIANCE CERTIFICATE

 

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AMENDED AND RESTATED CREDIT AGREEMENT

THIS CREDIT AGREEMENT (as hereafter amended, the “Agreement”) is dated as of
December 16, 2011 and is made by and among CROCS, INC., a Delaware corporation
(“Crocs”), CROCS RETAIL, INC., a Colorado corporation (“Crocs Retail”), OCEAN
MINDED, INC., a Colorado corporation (“Ocean”), JIBBITZ LLC, a Colorado limited
liability company (“Jibbitz”), BITE, INC., a Colorado corporation (“Bite”),
together with Crocs, Crocs Retail, Ocean, Jibbitz and each Person joined hereto
as a borrower from time to time, collectively referred to herein as, the
“Borrowers” or “Borrower”), the LENDERS (as hereinafter defined), PNC CAPITAL
MARKETS LLC, in its capacity as sole book runner and sole lead arranger (“Lead
Arranger”) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative
agent for the Lenders under this Agreement (hereinafter referred to in such
capacity as the “Administrative Agent”).

Borrower, Administrative Agent and Lenders have entered into that certain
Revolving Credit and Security Agreement dated as of September 25, 2009 (the
“Existing Credit Agreement”) pursuant to which Administrative Agent and Lenders
made loans and other advances to Borrower. This Agreement amends and restates
the Existing Credit Agreement but does not extinguish the obligations evidenced
thereby.

The Borrower has requested the Lenders to provide a revolving credit facility to
the Borrower in an aggregate principal amount not to exceed $100,000,000. In
consideration of their mutual covenants and agreements hereinafter set forth and
intending to be legally bound hereby, the parties hereto covenant and agree as
follows:

1. CERTAIN DEFINITIONS

1.1 Certain Definitions. In addition to words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:

Administrative Agent shall mean PNC Bank, National Association, and its
successors and assigns.

Administrative Agent’s Fee shall have the meaning specified in Section 10.9
[Administrative Agent’s Fee].

Administrative Agent’s Letter shall have the meaning specified in Section 10.9
[Administrative Agent’s Fee].

Affiliate as to any Person shall mean any other Person (i) which directly or
indirectly controls, is controlled by, or is under common control with such
Person, (ii) which beneficially owns or holds 20% or more of any class of the
voting or other equity interests of such Person, or (iii) 20% or more of any
class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person.

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Anti-Terrorism Laws shall mean any Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws
comprising or implementing the Bank Secrecy Act, and the Laws administered by
the United States Treasury Department’s Office of Foreign Asset Control (as any
of the foregoing Laws may from time to time be amended, renewed, extended, or
replaced).

Applicable Commitment Fee Rate shall mean the percentage rate per annum based on
Borrowers’ Revolving Facility Usage as set forth on the grid on Schedule 1.1(A)
below the heading “Commitment Fee.”

Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum
based on the Leverage Ratio then in effect according to the pricing grid on
Schedule 1.1(A) below the heading “Letter of Credit Fee.”

Applicable Margin shall mean, as applicable:

(A) the percentage spread to be added to the Base Rate applicable to Revolving
Credit Loans under the Base Rate Option based on the Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
“Revolving Credit Base Rate Spread”, or

(B) the percentage spread to be added to the LIBOR Rate applicable to Revolving
Credit Loans under the LIBOR Rate Option based on the Leverage Ratio then in
effect according to the pricing grid on Schedule 1.1(A) below the heading
“Revolving Credit LIBOR Rate Spread”.

Approved Fund shall mean any fund that is engaged in making, purchasing, holding
or investing in bank loans and similar extensions of credit in the ordinary
course of business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

Assignment and Assumption Agreement shall mean an assignment and assumption
agreement entered into by a Lender and an assignee permitted under Section 11.9
[Successors and Assigns], in substantially the form of Exhibit 1.1(A).

Authorized Officer shall mean, with respect to any Loan Party, the Chief
Executive Officer, President, Chief Financial Officer, Treasurer or Director of
Treasury of such Loan Party or such other individuals, designated by written
notice to the Administrative Agent from the Borrower, authorized to execute
notices, reports and other documents on behalf of the Loan Parties required
hereunder. The Borrower may amend such list of individuals from time to time by
giving written notice of such amendment to the Administrative Agent.

Availability shall mean the sum of (i) the difference between the Revolver
Facility Usage and the aggregate Revolver Commitments, plus (ii) Borrowers’
unrestricted cash maintained in deposit accounts in the United States (as
evidenced by Borrower’s most recent account statements).

 

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Base Rate shall mean, for any day, a fluctuating per annum rate of interest
equal to the highest of (a) the Federal Funds Open Rate, plus 0.5%, (b) the
Prime Rate, and (c) the Daily LIBOR Rate, plus 100 basis points (1.0%). Any
change in the Base Rate (or any component thereof) shall take effect at the
opening of business on the day such change occurs.

Base Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 4.1.1(i)
[Revolving Credit Interest Rate Options].

Borrower shall have the meaning set forth in the preamble hereto.

Borrowers on a Consolidated Basis shall mean the consolidation in accordance
with GAAP of the accounts or other items of the Borrowers and their respective
Subsidiaries.

Borrowing Date shall mean, with respect to any Loan, the date for the making
thereof or the renewal or conversion thereof at or to the same or a different
Interest Rate Option, which shall be a Business Day.

Borrowing Tranche shall mean specified portions of Loans outstanding as follows:
(i) any Loans to which a LIBOR Rate Option applies which become subject to the
same Interest Rate Option under the same Loan Request by the Borrower and which
have the same Interest Period shall constitute one Borrowing Tranche, and
(ii) all Loans to which a Base Rate Option applies shall constitute one
Borrowing Tranche.

Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in Pittsburgh, Pennsylvania and if the applicable Business Day relates
to any Loan to which the LIBOR Rate Option applies, such day must also be a day
on which dealings are carried on in the London interbank market.

Capital Expenditures shall mean expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements, replacements, substitutions
or additions thereto which have a useful life of more than one year, including
the total principal portion of Capitalized Leases, which, in accordance with
GAAP, would be classified as capital expenditures; provided, however, that the
term “Capital Expenditures” shall not include (a) expenditures made in
connection with the replacement, substitution, restoration or repair of assets
to the extent financed with (i) insurance proceeds paid on account of the loss
of or damage to the assets being replaced, substituted, restored or repaired or
(ii) awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced, (b) the amount of any credit granted
against the purchase price of equipment that is purchased simultaneously with
the trade in of existing equipment granted by the seller of such equipment for
the equipment being traded in at such time, (c) expenditures that are accounted
for as capital expenditures by the Borrower or any of its Subsidiaries and that
actually are paid for by a Person other than the Borrower or any of its
Subsidiaries and for which the Borrower has not or any of its Subsidiaries has
not provided or is not required to provide or incur, directly or indirectly, any
consideration or obligation to such Person or any other Person (whether before,
during or after such period), (d) the book value of any asset owned by the
Borrower or any of its Subsidiaries

 

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prior to or during such period to the extent that such book value is included as
a capital expenditure during such period as a result of such Person reusing or
beginning to reuse such asset during such period without a corresponding
expenditure actually having been made in such period, (e) purchases of
replacement property, plant or equipment to the extent financed by asset sales
of similar assets permitted hereunder; and (f) any non-cash compensation or
other non-cash costs reflected as additions to property, plant or equipment on
the consolidated balance sheet of the Borrower and its Subsidiaries.

Capitalized Leases shall mean the obligations of any Person to pay rent or any
other amounts under any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital lease obligations on a
balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP,
provided that obligations for payment of rent under operating leases if and to
the extent such leases are or would be classified as operating leases under
Financial Accounting Standards Board Accounting Standards Codification 840 as in
effect as of the date of this Agreement but are required to be reclassified as
capital leases as a result of amendments to Financial Accounting Standards Board
Accounting Standards Codification 840 made in accordance with those accounting
standards proposed in the Proposed Accounting Standards Update exposure draft
issued on August 17, 2010 shall not constitute Capitalized Leases hereunder.

Cash Management Agreements shall have the meaning specified in Section 2.5.6
[Swing Loans Under Cash Management Agreements].

Change of Control shall mean (a) 100% of the equity interests of any direct or
indirect Subsidiary of Crocs is no longer owned directly or indirectly (on a
fully diluted basis) by Crocs (except (i) directors’ qualifying shares for any
Foreign Subsidiary as required by law and (ii) pursuant to any transaction
permitted hereunder); (b) (i) any person or group of persons (within the meaning
of Section 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) shall have acquired beneficial ownership of (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Exchange Act) 20% or more of the voting equity interests of Crocs; or
(ii) from and after the date hereof, individuals who on the date hereof
constitute the Board of Directors of Crocs (together with any new directors
whose election by such Board of Directors or whose nomination for election by
the shareholders of Crocs was approved by a vote of a majority of the directors
then still in office who were either directors on the date hereof or whose
election or nomination for election was previously approved) cease for any
reason to constitute a majority of the board of directors of Crocs then in
office; or (c) any merger, consolidation or sale of substantially all of the
property or assets of any Borrower or any direct or indirect Subsidiary of any
Borrower except as permitted by Section 8.2.6.

Change in Law shall mean the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any Law, (b) any
change in any Law or in the administration, interpretation, implementation or
application thereof by any Official Body or (c) the making or issuance of any
request, rule, guideline or directive (whether or not having the force of Law)
by any Official Body; provided that notwithstanding anything herein to the

 

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contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, regulations, guidelines, interpretations or directives
thereunder or issued in connection therewith (whether or not having the force of
Law) and (y) all requests, rules, regulations, guidelines, interpretations or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities (whether or not having the force
of Law), in each case pursuant to Basel III, shall in each case be deemed to be
a Change in Law regardless of the date enacted, adopted, issued, promulgated or
implemented.

Closing Date shall mean the Business Day on which the first Loan shall be made,
which shall be December 16, 2011.

Code shall mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import, and
the rules and regulations thereunder, as from time to time in effect.

Collateral shall mean the collateral under the (i) Security Agreement
(ii) Pledge Agreement, (iii) Patent, Trademark and Copyright Security Agreement,
and (iv) any other security agreements entered into among Borrowers and Lenders
subsequent to the Closing Date.

Commitment shall mean as to any Lender the aggregate of its Revolving Credit
Commitment and, in the case of PNC, its Swing Loan Commitment, and Commitments
shall mean the aggregate of the Revolving Credit Commitments and Swing Loan
Commitment of all of the Lenders.

Commitment Fee shall have the meaning specified in Section 2.3 [Commitment
Fees].

Compliance Certificate shall have the meaning specified in Section 8.3.3
[Certificate of the Borrower].

Connection Income Taxes shall mean Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

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 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), 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 all leased real
property for such period.

Daily LIBOR Rate shall mean, for any day, the rate per annum determined by the
Administrative Agent by dividing (x) the Published Rate by (y) a number equal to
1.00 minus the LIBOR Reserve Percentage on such day.

 

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Defaulting Lender shall mean any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or Swing
Loans or (iii) pay over to the Administrative Agent, the Issuing Lender, PNC (as
the Swing Loan Lender) or any Lender any other amount required to be paid by it
hereunder, unless, in the case of clause (i) above, such Lender notifies the
Administrative Agent in writing that such failure is the result of such Lender’s
good faith determination that a condition precedent to funding (specifically
identified and including the particular default, if any) has not been satisfied,
(b) has notified the Borrower or the Administrative Agent in writing, or has
made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within two Business Days after
request by the Administrative Agent, acting in good faith, to provide a
certification in writing from an authorized officer of such Lender that it will
comply with its obligations (and is financially able to meet such obligations)
to fund prospective Loans and participations in then outstanding Letters of
Credit and Swing Loans under this Agreement, provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon the
Administrative Agent’s receipt of such certification in form and substance
satisfactory to the Administrative Agent, (d) has become the subject of a
Bankruptcy Event or (e) has failed at any time to comply with the provisions of
Section 5.3 with respect to purchasing participations from the other Lenders,
whereby such Lender’s share of any payment received, whether by setoff or
otherwise, is in excess of its Ratable Share of such payments due and payable to
all of the Lenders.

As used in this definition and in Section 2.9 [Defaulting Lenders], the term
“Bankruptcy Event” means, with respect to any Person, such Person or such
Person’s direct or indirect parent company becomes the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it, or, in the good faith determination of the Administrative Agent, has
taken any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any such proceeding or appointment, provided that a
Bankruptcy Event shall not result solely by virtue of any ownership interest, or
the acquisition of any ownership interest, in such Person or such Person’s
direct or indirect parent company by a Official Body or instrumentality thereof
if, and only if, such ownership interest does not result in or provide such
Person with immunity from the jurisdiction of courts within the United States or
from the enforcement of judgments or writs of attachment on its assets or permit
such Person (or such Official Body or instrumentality) to reject, repudiate,
disavow or disaffirm any contracts or agreements made by such Person.

Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of the
United States of America.

Drawing Date shall have the meaning specified in Section 2.8.3 [Disbursements,
Reimbursement].

 

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Environmental Laws shall mean all applicable federal, state, local, tribal,
territorial and foreign Laws (including common law), constitutions, statutes,
treaties, regulations, rules, ordinances and codes and any consent decrees,
settlement agreements, judgments, orders, directives, policies or programs
issued by or entered into with an Official Body pertaining or relating to:
(i) pollution or pollution control; (ii) protection of human health from
exposure to regulated substances; (iii) protection of the environment and/or
natural resources; (iv) the presence, use, management, generation, manufacture,
processing, extraction, treatment, recycling, refining, reclamation, labeling,
packaging, sale, transport, storage, collection, distribution, disposal or
release or threat of release of regulated substances; (v) the presence of
contamination; (vi) the protection of endangered or threatened species; and
(vii) the protection of environmentally sensitive areas.

ERISA shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to
time in effect.

ERISA Affiliate shall mean any trade or business (whether or not incorporated)
that, together with the Borrower are treated as a single employer under
Section 414 of the Code.

ERISA Event shall mean (a) a reportable event (under Section 4043 of ERISA and
regulations thereunder) with respect to a Pension Plan for which the 30-day
notice requirement has not been waived; (b) a withdrawal by Borrower or any
ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal, within the meaning of Section 4203 or 4205 of ERISA, by Borrower or
any ERISA Affiliate from a Multiemployer Plan or receipt by the Borrower or any
ERISA Affiliate of notice from a Mulitemployer Plan that such Multiemployer Plan
is in reorganization (within the meaning of Section 4241 of ERISA); (d) the
providing of a notice of intent to terminate, the treatment of a Plan amendment
as a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which could reasonably constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.

Event of Default shall mean any of the events described in Section 9.1 [Events
of Default] and referred to therein as an “Event of Default.”

Excluded Taxes shall mean any of the following Taxes imposed on or with respect
to a Recipient or required to be withheld or deducted from a payment to a
Recipient, (i) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal

 

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withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (a) such Lender acquires such interest
in such Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 5.6.2 [Replacement of a Lender]) or (b) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 5.9.7 [Status of Lenders], amounts with respect to such Taxes were
payable either to such Lender’s assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its lending office,
(iii) Taxes attributable to such Recipient’s failure to comply with 5.9.7
[Status of Lenders], and (iv) any U.S. federal withholding Taxes imposed under
FATCA. (except to the extent imposed due to the failure of the Borrower to
provide documentation or information to the IRS).

Executive Order No. 13224 shall mean the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.

Expiration Date shall mean, with respect to the Revolving Credit Commitments,
December 16, 2016.

FATCA shall mean Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.

Federal Funds Effective Rate for any day shall mean the rate per annum (based on
a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate” as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
“Federal Funds Effective Rate” for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.

Federal Funds Open Rate for any day shall mean the rate per annum (based on a
year of 360 days and actual days elapsed) which is the daily federal funds open
rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by the Administrative Agent in its reasonable discretion (for
purposes of this definition, an “Alternate Source”) (or if such rate for such
day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or
on any Alternate Source, or if there shall at any time, for any reason, no
longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate
Source, a comparable replacement rate determined by the Administrative Agent at
such time in its reasonable discretion (which determination shall be conclusive
absent manifest error); provided however, that if such day is not a Business
Day, the

 

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Federal Funds Open Rate for such day shall be the “open” rate on the immediately
preceding Business Day. If and when the Federal Funds Open Rate changes, the
rate of interest with respect to any advance to which the Federal Funds Open
Rate applies will change automatically without notice to the Borrower, effective
on the date of any such change.

Fixed Charge Coverage Ratio shall mean the ratio of Consolidated EBITDAR to
Fixed Charges.

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), Capital Expenditures and payments
under Capitalized Leases, rental expenses for all leased real property and
dividends and distributions (including tax distributions), in each case, of the
Borrowers on a Consolidated Basis.

Foreign Lender shall mean (i) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (ii) if the Borrower is not a U.S. Person, a Lender that
is resident or organized under the Laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes.

Foreign Subsidiary of any Person, shall mean any Subsidiary of such Person that
is not organized or incorporated in the United States or any State or territory
thereof.

GAAP shall mean generally accepted accounting principles as are in effect from
time to time, subject to the provisions of Section 1.3 [Accounting Principles],
and applied on a consistent basis both as to classification of items and
amounts.

Guarantor shall mean Western Brands Holding Company, a Colorado corporation,
Fury, Inc., a Colorado corporation, RA Footwear, LLC, a Colorado limited
liability company and other Person who may hereafter guarantee payment or
performance of Obligations.

Guaranty of any Person shall mean any obligation of such Person guaranteeing or
in effect guaranteeing any liability or obligation of any other Person in any
manner, whether directly or indirectly, including any agreement to indemnify or
hold harmless any other Person, any performance bond or other suretyship
arrangement and any other form of assurance against loss, except endorsement of
negotiable or other instruments for deposit or collection in the ordinary course
of business.

Guaranty Agreement shall mean the Continuing Agreement of Guaranty and
Suretyship, in form and substance satisfactory to Administrative Agent in its
reasonable discretion, executed and delivered by each of the Guarantors.

Hedging Obligations of any Person shall mean any and all obligations of such
Person under (i) any and all Lender Provided Hedges, (ii) any and all other
hedging transactions permitted by Administrative Agent hereunder (“Other Hedging
Transactions”), (iii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Lender Provided Hedge or Other Hedging
Transaction and (iv) any and all renewals, extensions and modifications of any
Lender Provided Hedge or Other Hedging Transaction and any and all substitutions
for any Lender Provided Hedge or Other Hedging Transaction.

 

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Indebtedness shall mean, as to any Person at any time, any and all indebtedness,
obligations or liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several)
of such Person for or in respect of: (i) borrowed money, (ii) amounts raised
under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations (contingent or otherwise) under any
letter of credit agreement, (iv) Hedging Obligations (provided that any such
amounts are limited to the Net Marked to Market Exposure of such Hedging
Obligations), (v) any other transaction (including forward sale or purchase
agreements, Capitalized Leases and conditional sales agreements) having the
commercial effect of a borrowing of money entered into by such Person to finance
its operations or capital requirements (but not including trade payables and
accrued expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than sixty (60) days past their original due date), or (vi) any
Guaranty of Indebtedness for borrowed money.

Indemnified Taxes shall mean (i) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document, and (ii) to the extent not otherwise described in
the preceding clause (i), Other Taxes.

Indemnitee shall have the meaning specified in Section 11.4.2 [Indemnification
by the Borrower].

Indemnity shall mean the Indemnity Agreement in form and substance satisfactory
to Administrative Agent in its Permitted Discretion relating to possible
environmental liabilities associated with any of the owned or leased real
property of the Loan Parties or their Subsidiaries.

Information shall mean all information received from or on behalf of the Loan
Parties or any of their Subsidiaries relating to the Loan Parties or any of such
Subsidiaries or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Lender on a non-confidential basis prior to disclosure by or on behalf
of the Loan Parties or any of their Subsidiaries.

Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action
or proceeding with respect to such Person (i) before any court or any other
Official Body under any bankruptcy, insolvency, reorganization or other similar
Law now or hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar
official) of any Loan Party or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person’s creditors generally or
any substantial portion of its creditors; undertaken under any Law.

Intercompany Subordination Agreement shall mean an Intercompany Subordination
Agreement among the Loan Parties in form and substance satisfactory to
Administrative Agent in its reasonable discretion.

 

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Interest Period shall mean the period of time selected by the Borrower in
connection with (and to apply to) any election permitted hereunder by the
Borrower to have Revolving Credit Loans bear interest under the LIBOR Rate
Option. Subject to the last sentence of this definition, such period shall be
one, two or three Months. Such Interest Period shall commence on the effective
date of such Interest Rate Option, which shall be (i) the Borrowing Date if the
Borrower is requesting new Loans, or (ii) the date of renewal of or conversion
to the LIBOR Rate Option if the Borrower is renewing or converting to the LIBOR
Rate Option applicable to outstanding Loans. Notwithstanding the second sentence
hereof: (A) any Interest Period which would otherwise end on a date which is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (B) the Borrower shall
not select, convert to or renew an Interest Period for any portion of the Loans
that would end after the Expiration Date.

Interest Rate Option shall mean any LIBOR Rate Option or Base Rate Option.

IRS shall mean the United States Internal Revenue Service.

Issuing Lender shall mean PNC and/or Wells Fargo Bank N.A., in their capacities
as issuers of Letters of Credit hereunder, and any other Lender that Borrower,
Administrative Agent and such other Lender may agree may from time to time issue
Letters of Credit hereunder.

Joint Venture shall mean a corporation, partnership, limited liability company
or other entity in which any Person other than the Loan Parties and their
Subsidiaries holds, directly or indirectly, an equity interest.

Law shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ,
decree, bond, judgment, authorization or approval of, lien or award by or
settlement agreement with any Official Body.

Lender Provided Hedge of any Person shall mean any of the following, in each
case provided by any Lender or its Affiliate: (i) any transaction (including an
agreement with respect to any such transaction) now existing or hereafter
entered into by such Person that is a rate swap transaction, swap option, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency
swap transaction, cross currency rate swap transaction, currency option, spot
transaction, credit protection transaction, credit swap, credit default swap,
credit default option, total return swap, credit spread transaction, repurchase
transaction, reverse repurchase transaction, buy/sell back transaction,
securities lending transaction or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether or not any such transaction is governed by or subject to any master
agreement and (ii) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

 

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Lenders shall mean the financial institutions named on Schedule 1.1(B) and their
respective successors and assigns as permitted hereunder, each of which is
referred to herein as a Lender. For the purpose of any Loan Document which
provides for the granting of a security interest or other Lien to the Lenders or
to the Administrative Agent for the benefit of the Lenders as security for the
Obligations, “Lenders” shall include any Affiliate of a Lender to which such
Obligation is owed.

Letter of Credit shall have the meaning specified in Section 2.8.1 [Issuance of
Letters of Credit].

Letter of Credit Borrowing shall have the meaning specified in Section 2.8.3
[Disbursements, Reimbursement].

Letter of Credit Fee shall have the meaning specified in Section 2.8.2 [Letter
of Credit Fees].

Letter of Credit Obligation shall mean, as of any date of determination, the
aggregate amount available to be drawn under all outstanding Letters of Credit
on such date (if any Letter of Credit shall increase in amount automatically in
the future, such aggregate amount available to be drawn shall currently give
effect to any such future increase) plus the aggregate Reimbursement Obligations
and Letter of Credit Borrowings on such date.

Letter of Credit Sublimit shall have the meaning specified in Section 2.8.1
[Issuance of Letters of Credit].

Leverage Ratio shall mean, as of any date of determination, the ratio of
(A) consolidated Indebtedness of Borrowers and its Subsidiaries on such date
plus the product of Borrowers’ rental expenses for all leased real property for
the four (4) most recently ended fiscal quarters (or the four fiscal quarters
ending on the date of determination if such date is the last day of a fiscal
quarter) multiplied by eight (8), to (B) Consolidated EBITDAR of the Borrowers
and its Subsidiaries for the four (4) most recently ended fiscal quarters (or
the four fiscal quarters ending on the date of determination if such date is the
last day of a fiscal quarter).

LIBOR Rate shall mean, with respect to the Loans comprising any Borrowing
Tranche to which the LIBOR Rate Option applies for any Interest Period, the
interest rate per annum determined by the Administrative Agent by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest 1/100th of
1% per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on such
other substitute Bloomberg page that displays rates at which US dollar deposits
are offered by leading banks in the London interbank deposit market), or the
rate which is quoted by another source selected by the Administrative Agent
which has been approved by the British Bankers’ Association as an authorized
information vendor for the purpose of displaying rates at which US dollar
deposits are offered by leading banks in the London interbank deposit market
(for purposes of this definition, an “Alternate Source”), at approximately 11:00
a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period as the London interbank offered rate for U.S. Dollars for an
amount

 

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comparable to such Borrowing Tranche and having a borrowing date and a maturity
comparable to such Interest Period (or if there shall at any time, for any
reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any
Alternate Source, a comparable replacement rate determined by the Administrative
Agent, in its reasonable discretion, at such time (which determination shall be
conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the
LIBOR Reserve Percentage. LIBOR may also be expressed by the following formula:

 

LIBOR Rate

 

  =  

  

London interbank offered rates quoted by Bloomberg or appropriate successor as
shown on Bloomberg Page BBAM1

        1.00 - LIBOR Reserve Percentage   

The LIBOR Rate shall be adjusted with respect to any Loan to which the LIBOR
Rate Option applies that is outstanding on the effective date of any change in
the LIBOR Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrower of the LIBOR Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error.

LIBOR Rate Option shall mean the option of the Borrower to have Loans bear
interest at the rate and under the terms set forth in Section 4.1.1(ii)
[Revolving Credit LIBOR Rate Option].

LIBOR Reserve Percentage shall mean as of any day the maximum percentage in
effect on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”).

Lien shall mean any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
whether voluntarily or involuntarily given, including any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).

Loan Documents shall mean this Agreement, the Administrative Agent’s Letter, the
Guaranty Agreement, the Indemnity, the Intercompany Subordination Agreement, any
Mortgage, the Notes, the Patent, Trademark and Copyright Security Agreement, the
Pledge Agreement, the Security Agreement, any Lender Provided Hedge (including
without limitation that certain Master Agreement dated on or around the date
hereof by and among Crocs, Colorado Footwear CV (Netherlands), Crocs Europe BV
(Netherlands), Crocs Canada, Crocs Asia PTE – Japan Branch, Crocs Japan GK,
Crocs Singapore PTE, Crocs Australia and Administrative Agent) and any other
instruments, certificates or documents delivered in connection herewith or
therewith.

Loan Parties shall mean the Borrower and the Guarantors.

 

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Loan Request shall have the meaning specified in Section 2.4 [Revolving Credit
Loan Requests; Swing Loan Requests].

Loans shall mean collectively and Loan shall mean separately all Revolving
Credit Loans and Swing Loans or any Revolving Credit Loan or Swing Loan.

Material Adverse Change shall mean a material adverse change in (a) the
financial condition, results of operations, assets, business or properties of
the Loan Parties taken as a whole, (b) any Borrower’s ability to duly and
punctually pay or perform the Obligations in accordance with the terms thereof,
(c) the value of the Collateral taken as a whole, or Administrative Agent’s
Liens on a material portion of the Collateral or the priority of any such Lien
or (d) the practical realization of the benefits of Administrative Agent’s and
each Lender’s rights and remedies taken as a whole under this Agreement and the
Loan Documents.

Month, with respect to an Interest Period under the LIBOR Rate Option, shall
mean the interval between the days in consecutive calendar months numerically
corresponding to the first day of such Interest Period. If any LIBOR Rate
Interest Period begins on a day of a calendar month for which there is no
numerically corresponding day in the month in which such Interest Period is to
end, the final month of such Interest Period shall be deemed to end on the last
Business Day of such final month.

Multiemployer Plan shall mean any employee benefit plan which is a
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any ERISA Affiliate is making or has an obligation to make
contributions or, within the preceding five (5) Plan years, has made or had an
obligation to make such contributions.

“Net Mark to Market Exposure” of any Person shall mean, as of any date of
determination with respect to any Hedging Obligation, the excess (if any) of all
unrealized losses over all unrealized profits of such Person arising from such
Hedging Obligation. “Unrealized losses” shall mean the fair market value of the
cost to such Person of replacing the Lender Provided Hedge or Other Hedging
Transaction giving rise to such Hedging Obligation as of the date of
determination (assuming the Lender Provided Hedge or Other Hedging Transaction
were to be terminated as of that date), and “unrealized profits” means the fair
market value of the gain to such Person of replacing such Lender Provided Hedge
or Other Hedging Transaction as of the date of determination (assuming such
Lender Provided Hedge or Other Hedging Transaction were to be terminated as of
that date).

Non-Consenting Lender shall have the meaning specified in Section 11.2
[Modifications, Amendments or Waivers].

Notes shall mean, collectively, the promissory notes in the form of Exhibit
1.1(N)(1) evidencing the Revolving Credit Loans and in the form of Exhibit
1.1(N)(2) evidencing the Swing Loan.

Obligation shall mean any obligation or liability of any of the Loan Parties,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with (i) this Agreement, the Notes, the Letters of Credit, the
Administrative Agent’s Letter or any other Loan Document

 

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whether to the Administrative Agent, any of the Lenders or their Affiliates or
other persons provided for under such Loan Documents, (ii) any Lender Provided
Hedge and (iii) any Other Lender Provided Financial Service Product.

Official Body shall mean the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including, without limitation, the
Financial Accounting Standards Board, the Bank for International Settlements or
the Basel Committee on Banking Supervision or any successor or similar authority
to any of the foregoing).

Other Connection Taxes shall mean, with respect to any Recipient, Taxes imposed
as a result of such Recipient conducting or having conducted a sufficient level
of ongoing business or income-generating activity in the jurisdiction imposing
such Tax to subject it to tax generally on the income or privilege of doing
business or unretained earnings associated with such activity (but, without
broadening the scope of the foregoing, not including any Tax imposed as a result
of such Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Documents, or sold or assigned an interest in any Loan or Loan Document).

Other Lender Provided Financial Service Product shall mean agreements or other
arrangements under which any Lender or Affiliate of a Lender provides any of the
following products or services to any of the Loan Parties: (a) credit cards,
(b) credit card processing services, (c) debit cards, (d) purchase cards,
(e) ACH transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) foreign currency exchange.

Other Taxes shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.6.2 [Replacement of a Lender]).

Participant has the meaning specified in Section 11.9.4 [Participations].

Participant Register shall have the meaning specified in Section 11.9.4
[Participations].

Participation Advance shall have the meaning specified in Section 2.8.3
[Disbursements, Reimbursement].

Patent, Trademark and Copyright Security Agreement shall mean the Patent,
Trademark and Copyright Security Agreement, in form and substance satisfactory
to Administrative Agent in its reasonable discretion, executed and delivered by
each of the Loan Parties to the Administrative Agent for the benefit of the
Lenders.

 

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Payment Date shall mean the first day of each calendar month after the date
hereof and on the Expiration Date or upon acceleration of the Notes.

Payment In Full shall mean the payment in full in cash of the Loans and other
Obligations hereunder, termination of the Commitments and expiration or
termination of all Letters of Credit (other than in respect of (i) indemnity
obligations which survive the termination of this Agreement and the other Loan
Documents for which no claim or assertion has been made in writing by
Administrative Agent or Lenders), and (ii) Letters of Credit, Lender Provided
Hedges or Other Lender Provided Financial Services Products for which cash
collateralization has been provided to Administrative Agent or Issuing Lender in
an amount reasonably acceptable to Administrative Agent or such Issuing Lender.

PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.

Pension Plan shall mean any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and is sponsored or maintained by Borrower or any
ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has been obligated to make contributions
at any time during the immediately preceding five plan years.

Permitted Acquisitions shall mean acquisitions of the assets or equity of
another Person so long as: (a) after giving effect to such acquisition,
Borrowers have Availability of not less than $40,000,000; (b) the total costs
and liabilities (including without limitation, all assumed liabilities, all
earn-out payments, deferred payments and the value of any other stock or assets
transferred, assigned or encumbered with respect to such acquisitions) of all
such acquisitions do not exceed $20,000,000 for any single acquisition or
$40,000,000 in any fiscal year; (c) with respect to the acquisition of equity,
(i) such acquired company shall be added as a Borrower to this Agreement and be
jointly and severally liable for all Obligations, and (ii) Administrative Agent
shall be granted a first priority lien in all assets of such acquired company;
(d) the acquired company or property is used or useful in the same or a similar
line of business as the Borrowers were engaged in on the Closing Date (or any
reasonable extensions or expansions thereof); (e) Administrative Agent shall
have received a first-priority security interest in all acquired assets or
equity, subject to documentation satisfactory to Administrative Agent; (f) the
board of directors (or other comparable governing body) of such company shall
have duly approved the transaction; (g) the Borrowers shall have delivered to
Agent (i) a pro forma balance sheet and pro forma financial statements and a
Compliance Certificate demonstrating that upon giving effect to such
acquisition, Borrower is in compliance, on a Pro Forma Basis, with the financial
covenants set forth in Section 8.2.14 [Minimum Fixed Charge Coverage Ratio] and
8.2.16 [Maximum Leverage Ratio] as of the most recent fiscal quarter end and
(ii) audited (to the extent audited exist) financial statements of the acquired
entity for the two most recent fiscal years then ended, in form and substance
reasonably acceptable to Administrative Agent, audited

 

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in accordance with GAAP; (h) if such acquisition includes general partnership
interests or any other equity interests that do not have a corporate (or
similar) limitation on liability of the owners thereof, then such acquisition
shall be effected by having such equity interests acquired by a corporate or
other limited liability entity holding company directly or indirectly
wholly-owned by a Borrower and newly formed for the sole purpose of effecting
such acquisition; and (i) no Potential Default or Event of Default shall have
occurred or will occur after giving pro forma effect to such acquisition.]

Permitted Discretion shall mean a determination made in good faith and in the
exercise of commercially reasonable (from the perspective of a secured senior
lender) business judgment.

Permitted Foreign Investments shall mean

(i) obligations issued or guaranteed by the United States of America or any
agency thereof or any foreign country in which a Foreign Subsidiary is
conducting business;

(ii) commercial paper with maturities of not more than one hundred eighty
(180) days and a published rating of not less than A-1 by Standard & Poor’s, P-1
by Moody’s Investors Service, Inc. (or the equivalent rating) or a combined
rating of A-1/P-2 or A-2/P-1;

(iii) certificates of time deposit and bankers’ acceptances having maturities of
not more than one hundred eighty (180) days and repurchase agreements backed by
United States government securities of a commercial bank in the United States of
America or in any foreign country in which a Foreign Subsidiary is conducting
business if (i) such bank has a combined capital and surplus of at least
$500,000,000, or (ii) its debt obligations, or those of a holding company of
which it is a Subsidiary, are rated not less than A (or the equivalent rating)
by a nationally recognized investment rating agency;

(iv) U.S. money market funds that invest solely in obligations issued or
guaranteed by the United States of America or an agency thereof or any foreign
country in which a Foreign Subsidiary is conducting business;

(v) investments made under the Cash Management Agreements;

(vi) investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers, customers and other Persons and in
settlement of delinquent obligations of, and other disputes with, customers,
suppliers and other Persons arising in the ordinary course of business;

(vii) investments (including debt obligations) received in connection with
dispositions permitted pursuant to this Agreement;

(viii) investments pursuant to Lender Provided Hedges;

(ix) deposits made in the ordinary course of business to secure the performance
of leases or other contractual arrangements;

 

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(x) to the extent constituting an investment, Capital Expenditures not
prohibited by this Agreement;

(xi) investments in deposit and securities accounts opened in the ordinary
course of business and in compliance with the terms of the Loan Documents;

(xii) unsecured repurchase agreements with a term of not more than thirty
(30) days for securities described in clause (i) and (ii) above and entered into
with a financial institution satisfying the criteria described in clause
(iii) above; and

(xiv) advances in the form of prepayment of expenses to a vendor, supplier or
trade creditor in the ordinary course of business.

Permitted Investments shall mean:

(i) obligations issued or guaranteed by the United States of America or any
agency thereof;

(ii) commercial paper with maturities of not more than one hundred eighty
(180) days and a published rating of not less than A-1 by Standard & Poor’s, P-1
by Moody’s Investors Service, Inc. (or the equivalent rating) or a combined
rating of A-1/P-2 or A-2/P-1.

(iii) certificates of time deposit and bankers’ acceptances having maturities of
not more than one hundred eighty (180) days and repurchase agreements backed by
United States government securities of a commercial bank if (i) such bank has a
combined capital and surplus of at least $500,000,000, or (ii) its debt
obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency;

(iv) U.S. money market funds that invest solely in obligations issued or
guaranteed by the United States of America or an agency thereof;

(v) investments made under the Cash Management Agreements;

(vi) investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers, customers and other Persons and in
settlement of delinquent obligations of, and other disputes with, customers,
suppliers and other Persons arising in the ordinary course of business;

(vii) investments (including debt obligations) received in connection with
dispositions permitted pursuant to this Agreement;

(viii) investments pursuant to Lender Provided Hedges;

(ix) deposits made in the ordinary course of business to secure the performance
of leases or other contractual arrangements;

 

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(x) to the extent constituting an investment, Capital Expenditures not
prohibited by this Agreement;

(xi) investments in deposit and securities accounts opened in the ordinary
course of business and in compliance with the terms of the Loan Documents;

(xii) unsecured repurchase agreements with a term of not more than thirty
(30) days for securities described in clause (i) and (ii) above and entered into
with a financial institution satisfying the criteria described in clause
(iii) above; and

(xiii) advances in the form of prepayment of expenses to a vendor, supplier or
trade creditor in the ordinary course of business.

Permitted Liens shall mean:

(i) Liens in favor of Administrative Agent for the benefit of Administrative
Agent and Lenders;

(ii) Liens for taxes, assessments or other governmental charges not delinquent
or being Properly Contested;

(iii) deposits or pledges to secure obligations under worker’s compensation,
social security or similar laws, or under unemployment insurance;

(iv) deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of like nature arising in
the ordinary course of business;

(v) judgment Liens in respect of judgments that do not constitute an Event of
Default under Section 9.1.6 [Final Judgments or Orders];

(vi) carriers’, warehousemen’s, mechanics’, workers’, materialmen’s or other
like Liens arising in the ordinary course of business with respect to
obligations which are not due or which are being Properly Contested;

(vii) Liens on property leased by any Loan Party or Subsidiary of a Loan Party
under Capitalized Leases and operating leases permitted in Section 8.2.13
[Capital Expenditures and Leases] securing obligations of such Loan Party or
Subsidiary to the lessor under such leases;

(viii) any Lien existing on the date of this Agreement and described on Schedule
1.1(P), provided that the principal amount secured thereby is not hereafter
increased, and no additional assets become subject to such Lien;

(ix) Purchase Money Security Interests and Capitalized Leases; provided that the
aggregate amount of loans and deferred payments secured by such Purchase Money
Security Interests and Capitalized Leases shall not exceed $60,000,000 in the
aggregate (excluding for the purpose of this computation any loans or deferred
payments secured by Liens described on Schedule 1.1(P));

 

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(x) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct
of business;

(xi) any interest or title of lessor under any operating lease;

(xii) normal and customary rights of setoff upon deposits of cash in favor of
banks and other depository institutions and Liens of a collecting bank arising
under the Uniform Commercial Code on checks in the course of collection;

(xiii) purported Liens evidenced by the filing of precautionary UCC financing
statements relating solely to operating leases of personal property entered into
in the ordinary course of business;

(xiv) Liens pursuant to leases and subleases of real property which do not
interfere with the ordinary course of business, which are made on customary and
usual terms applicable to similar properties and which are subordinated to
Agent’s Liens in a manner reasonably satisfactory to Agent;

(xv) any interest or title of a lessor or sublessor, licensor or sublicensor
under any lease or license not prohibited by this Agreement; and

(xvi) Liens with respect to the cash collateralization of Lender Provided Hedges
or Other Lender Provided Financial Service Products.

Permitted Refinancing shall mean, with respect to any Person, any Indebtedness
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund (collectively, to “Refinance”), the
Indebtedness being Refinanced (or previous refinancings thereof constituting a
Permitted Refinancing); provided, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest and premiums thereon and underwriting
discounts, defeasance costs, fees, commissions and expenses), (b) the weighted
average life to maturity of such Permitted Refinancing is greater than or equal
to the weighted average life to maturity of the Indebtedness being Refinanced,
(c) such Permitted Refinancing shall not require any scheduled principal
payments due prior to the Expiration Date in excess of, or prior to, the
scheduled principal payments due prior to Expiration Date for the Indebtedness
being Refinanced, and (d) such Permitted Refinancing shall be otherwise on terms
not materially less favorable to the Borrower than those contained in the
documentation governing the Indebtedness being Refinanced, including, without
limitation, with respect to financial and other covenants and events of default.

 

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Person shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization,
joint venture, government or political subdivision or agency thereof, or any
other entity.

Plan shall mean an employee benefit plan, as defined in Section 3(3) of ERISA,
(including a (i) a Pension Plan, (ii) a Multiemployer Plan, or (iii) a Welfare
Plan, as defined in Section 3(1) of ERISA) which provides self insured benefits)
which is maintained by the Borrower or any ERISA Affiliate or has at any time
within the preceding (5) years been maintained, or to which there has been an
obligation to contribute, by any entity which was at the time an ERISA
Affiliate.

Pledge Agreement shall mean the Pledge Agreement, in form and substance
satisfactory to Administrative Agent in its reasonable discretion, executed and
delivered by the applicable Loan Parties to the Administrative Agent for the
benefit of the Lenders.

PNC shall mean PNC Bank, National Association, its successors and assigns.

Potential Default shall mean any event or condition which with notice or passage
of time, or both, would constitute an Event of Default.

Prime Rate shall mean the interest rate per annum announced from time to time by
the Administrative Agent at its Principal Office as its then prime rate, which
rate may not be the lowest or most favorable rate then being charged commercial
borrowers or others by the Administrative Agent. Any change in the Prime Rate
shall take effect at the opening of business on the day such change is
announced.

Principal Office shall mean the main banking office of the Administrative Agent
in Pittsburgh, Pennsylvania.

Prior Security Interest shall mean a valid and enforceable perfected
first-priority security interest under the Uniform Commercial Code in the
Collateral which is subject only to statutory Liens for taxes not yet due and
payable or Purchase Money Security Interests.

Pro Forma Basis shall mean, with respect to any Specified Transaction, that
Borrower is in compliance on a pro forma basis with the applicable covenant,
ratio, calculation or requirement herein calculated as if such Specified
Transaction and the related adjustments set forth below had occurred on the
first day of the four fiscal quarter period most recently ended for which
financial statements have been delivered pursuant to Section 8.3.1 [Quarterly
Financial Statements]. The following related adjustments shall be calculated as
follows, each as evidenced by a quality of earnings report reasonably
satisfactory to Agent: (i) income statement items (whether positive or negative)
attributable to the applicable property or Person the subject of an acquisition,
sale, transfer or other disposition of all or substantially all of the capital
stock in any Subsidiary or any division or product line of the Borrower or any
Subsidiary, shall be included, (ii) any retirement, incurrence or assumption of
any Indebtedness by Borrower or any Subsidiary in connection with a Specified
Transaction shall be deemed to have borne interest (a) in the case of fixed rate
Indebtedness, at the rate applicable thereto, or (b) in the case of floating
rate Indebtedness, at the rates which were or would have been applicable thereto
during the period when such Indebtedness was or was deemed to be outstanding;
and provided that, Consolidated EBTIDAR may be further adjusted without
duplication of any adjustments to Consolidated

 

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EBITDAR by, without duplication, (x) any credit for acquisition-related costs
and savings to the extent expressly required or permitted to be reflected in
Borrower’s financial statements pursuant to Article 11 of Regulation S-X under
the Securities Act of 1933, as amended, and (y) actions taken by the Borrower or
any of its Subsidiaries prior to or during such period for the purpose of
realizing reasonably identifiable and factually supportable cost savings, in
each case under this clause (y) calculated by the Borrower, as evidenced by a
quality of earnings reports reasonably satisfactory to Agent.

Properly Contested shall mean, in the case of any Indebtedness or Lien, as
applicable, of any Person (including any taxes) that is not paid as and when due
or payable by reason of such Person’s bona fide dispute concerning its liability
to pay same or concerning the amount thereof, (i) such Indebtedness or Lien, as
applicable, is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; (ii) such Person has established
appropriate reserves as shall be required in conformity with GAAP; (iii) the
non-payment of such Indebtedness will not result in a Material Adverse Change
and will not result in the forfeiture of any assets of such Person; (iv) no Lien
is imposed upon any of such Person’s assets with respect to such Indebtedness
unless such Lien is at all times junior and subordinate in priority to the Liens
in favor of the Administrative Agent (except only with respect to property taxes
that have priority as a matter of applicable state law) and enforcement of such
Lien is stayed during the period prior to the final resolution or disposition of
such dispute; (v) if such Indebtedness or Lien, as applicable, results from, or
is determined by the entry, rendition or issuance against a Person or any of its
assets of a judgment, writ, order or decree, enforcement of such judgment, writ,
order or decree is stayed pending a timely appeal or other judicial review; and
(vi) if such contest is abandoned, settled or determined adversely (in whole or
in part) to such Person, such Person forthwith pays such Indebtedness and all
penalties, interest and other amounts due in connection therewith.

Published Rate shall mean the rate of interest published each Business Day in
The Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the rate at
which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market for a one month period as published in another publication
selected by the Administrative Agent in its reasonable discretion).

Purchase Money Security Interest shall mean Liens upon tangible personal
property securing loans to any Loan Party or Subsidiary of a Loan Party or
deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.

Ratable Share shall mean the proportion that a Lender’s Commitment (excluding
the Swing Loan Commitment) bears to the Commitments (excluding the Swing Loan
Commitment) of all of the Lenders, provided that in the case of Section 2.9
[Defaulting Lenders] when a Defaulting Lender shall exist, “Ratable Share” shall
mean the percentage of the aggregate Commitments (disregarding any Defaulting
Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Ratable Share shall be determined based upon the
Commitments (excluding the Swing Loan Commitment) most recently in effect,
giving effect to any assignments.

 

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Recipient shall mean (i) the Administrative Agent, (ii) any Lender and (iii) the
Issuing Lender, as applicable.

Reimbursement Obligation shall have the meaning specified in Section 2.8.3
[Disbursements, Reimbursement].

Related Parties shall mean, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

Relief Proceeding shall mean any proceeding seeking a decree or order for relief
in respect of any Loan Party or Subsidiary of a Loan Party in a voluntary or
involuntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or Subsidiary of a Loan Party for any
substantial part of its property, or for the winding-up or liquidation of its
affairs, or an assignment for the benefit of its creditors.

Required Lenders shall mean

(A) If there exists fewer than three (3) Lenders, all Lenders (other than any
Defaulting Lender), and

(B) If there exists three (3) or more Lenders, Lenders (other than any
Defaulting Lender) having more than fifty percent (50%) of the aggregate amount
of the Revolving Credit Commitments of the Lenders (excluding any Defaulting
Lender) or, after the termination of the Revolving Credit Commitments, the
outstanding Revolving Credit Loans and Ratable Share of Letter of Credit
Obligations of the Lenders (excluding any Defaulting Lender); provided however
that if there are three (3) or more Lenders, at least two (2) Lenders will be
required to constitute Required Lenders.

Required Share shall have the meaning assigned to such term in Section 5.11
[Settlement Date Procedures].

Revolving Credit Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.1(B) in the column labeled
“Amount of Commitment for Revolving Credit Loans,” as such Commitment is
thereafter assigned or modified and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Lenders.

Revolving Credit Loans shall mean collectively and Revolving Credit Loan shall
mean separately all Revolving Credit Loans or any Revolving Credit Loan made by
the Lenders or one of the Lenders to the Borrower pursuant to Section 2.1
[Revolving Credit Commitments] or 2.8.3 [Disbursements, Reimbursement].

Revolving Facility Usage shall mean at any time the sum of the outstanding
Revolving Credit Loans, the outstanding Swing Loans, and the Letter of Credit
Obligations.

 

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Security Agreement shall mean the Security Agreement, in form and substance
satisfactory to Administrative Agent in its reasonable discretion, executed and
delivered by each of the Loan Parties to the Administrative Agent for the
benefit of the Lenders.

Settlement Date shall mean the Business Day on which the Administrative Agent
elects to effect settlement pursuant Section 5.11 [Settlement Date Procedures].

Solvent shall mean, with respect to any Person on any date of determination,
taking into account such right of reimbursement, contribution or similar right
available to such Person from other Persons, that on such date (i) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (ii) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (iv) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature, and (v) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.

Specified Transaction shall mean, with respect to any period, any Permitted
Acquisition, disposition of assets, or incurrence or repayment of Indebtedness,
consummated by the Borrower or any of its Subsidiaries during such period (or
the effects of which have occurred or are implemented during such period) or
other event that by the terms of this Agreement requires “pro forma compliance”
with a test or covenant hereunder or requires such test or covenant to be
calculated on a “Pro Forma Basis”.

Standard & Poor’s shall mean Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc.

Statements shall have the meaning specified in Section 6.1.6(i) [Historical
Statements].

Subsidiary of any Person at any time shall mean any corporation, trust,
partnership, any limited liability company or other business entity (i) of which
more than 50% of the outstanding voting securities or other interests normally
entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person’s Subsidiaries, or (ii) which is controlled or capable of
being controlled by such Person or one or more of such Person’s Subsidiaries.

 

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Subsidiary Equity Interests shall have the meaning specified in Section 6.1.2
[Subsidiaries and Owners; Investment Companies].

Swing Loan Commitment shall mean PNC’s commitment to make Swing Loans to the
Borrower pursuant to Section 2.1.2 [Swing Loan Commitment] hereof in an
aggregate principal amount up to $5,000,000.

Swing Loan Note shall mean the Swing Loan Note of the Borrower in the form of
Exhibit 1.1(N)(2) evidencing the Swing Loans, together with all amendments,
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.

Swing Loan Request shall mean a request for Swing Loans made in accordance with
Section 2.4.2 [Swing Loan Requests] hereof.

Swing Loans shall mean collectively and Swing Loan shall mean separately all
Swing Loans or any Swing Loan made by PNC to the Borrower pursuant to
Section 2.1.2 [Swing Loan Commitment] hereof.

Taxes shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Official Body, including any interest, additions to
tax or penalties applicable thereto.

USA Patriot Act shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

U.S. Person shall mean any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

U.S. Tax Compliance Certificate shall have the meaning specified in
Section 5.9.7 [Status of Lenders].

Withholding Agent shall mean any Loan Party and the Administrative Agent.

1.2 Construction. Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this Agreement and
each of the other Loan Documents: (i) references to the plural include the
singular, the plural, the part and the whole and the words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”; (ii) the words “hereof,” “herein,” “hereunder,” “hereto” and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole; (iii) article, section,
subsection, clause, schedule and exhibit references are to this Agreement or
other Loan Document, as the case may be, unless otherwise specified;
(iv) reference to any Person includes such Person’s successors and assigns;
(v) reference to any agreement, including this Agreement and any other Loan
Document together with the schedules and exhibits hereto or thereto, document or
instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated; (vi) relative to the
determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “through and including”; (vii) the
words “asset” and

 

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“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, (viii) section headings herein and in
each other Loan Document are included for convenience and shall not affect the
interpretation of this Agreement or such Loan Document, and (ix) unless
otherwise specified, all references herein to times of day shall be references
to Eastern Time.

1.3 Accounting Principles; Changes in GAAP. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP; provided, however, that all
accounting terms used in Section 8.2 [Negative Covenants] (and all defined terms
used in the definition of any accounting term used in Section 8.2 shall have the
meaning given to such terms (and defined terms) under GAAP as in effect on the
date hereof applied on a basis consistent with those used in preparing the
Statements referred to in Section 6.1.6(i) [Historical Statements]).
Notwithstanding the foregoing, if the Borrower notifies the Administrative Agent
in writing that the Borrower wishes to amend any financial covenant in
Section 8.2 of this Agreement, any related definition and/or the definition of
the term Leverage Ratio for purposes of interest, Letter of Credit Fee and
Commitment Fee determinations to eliminate the effect of any change in GAAP
occurring after the Closing Date on the operation of such financial covenants
and/or interest, Letter of Credit Fee or Commitment Fee determinations (or if
the Administrative Agent notifies the Borrower in writing that the Required
Lenders wish to amend any financial covenant in Section 8.2, any related
definition and/or the definition of the term Leverage Ratio for purposes of
interest, Letter of Credit Fee and Commitment Fee determinations to eliminate
the effect of any such change in GAAP), then the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratios or
requirements to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, the Loan Parties’ compliance with such covenants and/or the definition
of the term Leverage Ratio for purposes of interest, Letter of Credit Fee and
Commitment Fee determinations shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenants or definitions are amended in a
manner satisfactory to the Borrower and the Required Lenders, and the Loan
Parties shall provide to the Administrative Agent, when they delivers their
financial statements pursuant to Section 8.3.1 [Quarterly Financial Statements]
and 8.3.2 [Annual Financial Statements] of this Agreement, such reconciliation
statements as shall be reasonably requested by the Administrative Agent;
provided further that the Borrower shall not be obligated to pay an amendment
fee (excluding costs and expenses and reasonable attorneys’ fees) in connection
with such amendment and the pricing of the Loans shall not be increased in
connection with such amendment. No delay by the Borrower, the Administrative
Agent or the Required Lenders in requiring such an amendment shall limit such
Person’s rights to require such an amendment at any time after such a change in
accounting principles.

 

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2. REVOLVING CREDIT AND SWING LOAN FACILITIES

2.1 Revolving Credit Commitments.

2.1.1 Revolving Credit Loans. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, each Lender
severally agrees to make Revolving Credit Loans to the Borrower at any time or
from time to time on or after the date hereof to the Expiration Date; provided
that after giving effect to each such Loan (i) the aggregate amount of Revolving
Credit Loans from such Lender shall not exceed such Lender’s Revolving Credit
Commitment minus such Lender’s Ratable Share of the Letter of Credit Obligations
and (ii) the Revolving Facility Usage shall not exceed the Revolving Credit
Commitments. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.

2.1.2 Swing Loan Commitment. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, and in order
to facilitate loans and repayments between Settlement Dates, PNC may, at its
option, cancelable at any time for any reason whatsoever, make swing loans (the
“Swing Loans”) to the Borrower at any time or from time to time after the date
hereof to the Expiration Date, in an aggregate principal amount up to but not in
excess of the Swing Loan Commitment, provided that after giving effect to such
Loan, the Revolving Facility Usage shall not exceed the Revolving Credit
Commitments. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 2.1.2.

2.2 Nature of Lenders’ Obligations with Respect to Revolving Credit Loans. Each
Lender shall be obligated to participate in each request for Revolving Credit
Loans pursuant to Section 2.4 [Revolving Credit Loan Requests; Swing Loan
Requests] in accordance with its Ratable Share. The aggregate of each Lender’s
Revolving Credit Loans outstanding hereunder to the Borrower at any time shall
never exceed its Revolving Credit Commitment minus its Ratable Share of the
outstanding Swing Loans and Letter of Credit Obligations. The obligations of
each Lender hereunder are several. The failure of any Lender to perform its
obligations hereunder shall not affect the Obligations of the Borrower to any
other party nor shall any other party be liable for the failure of such Lender
to perform its obligations hereunder. The Lenders shall have no obligation to
make Revolving Credit Loans hereunder on or after the Expiration Date.

2.3 Commitment Fees. Accruing from the date hereof until the Expiration Date,
the Borrower agrees to pay to the Administrative Agent for the account of each
Lender according to its Ratable Share, a nonrefundable commitment fee (the
“Commitment Fee”) equal to the Applicable Commitment Fee Rate (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed)
multiplied by the average daily difference between the amount of (i) the
Revolving Credit Commitments (for purposes of this computation, PNC’s Swing
Loans shall be deemed to be borrowed amounts under its Revolving Credit
Commitment) and (ii) the Revolving Facility Usage; provided, however, that any
Commitment Fee accrued with respect to the Revolving Credit Commitment of a
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the

 

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extent that such Commitment Fee shall otherwise have been due and payable by the
Borrower prior to such time; and provided further that no Commitment Fee shall
accrue with respect to the Revolving Commitment of a Defaulting Lender so long
as such Lender shall be a Defaulting Lender. Subject to the proviso in the
directly preceding sentence, all Commitment Fees shall be payable in arrears on
the first day of each calendar quarter with respect to the previous calendar
quarter.

2.4 Revolving Credit Loan Requests; Swing Loan Requests.

2.4.1 Revolving Credit Loan Requests. Except as otherwise provided herein, the
Borrower may from time to time prior to the Expiration Date request the Lenders
to make Revolving Credit Loans, or renew or convert the Interest Rate Option
applicable to existing Revolving Credit Loans pursuant to Section 4.2 [Interest
Periods], by delivering to the Administrative Agent, not later than 1:00 p.m.,
(i) three (3) Business Days prior to the proposed Borrowing Date with respect to
the making of Revolving Credit Loans to which the LIBOR Rate Option applies or
the conversion to or the renewal of the LIBOR Rate Option for any Loans; and
(ii) the same Business Day of the proposed Borrowing Date with respect to the
making of a Revolving Credit Loan to which the Base Rate Option applies or the
last day of the preceding Interest Period with respect to the conversion to the
Base Rate Option for any Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.4.1 or a request by telephone promptly
confirmed in writing by letter, facsimile or telex in such form (each, a “Loan
Request”), it being understood that the Administrative Agent may rely on the
authority of any individual making such a telephonic request without the
necessity of receipt of such written confirmation. Each Loan Request shall be
irrevocable and shall specify the aggregate amount of the proposed Loans
comprising each Borrowing Tranche, and, if applicable, the Interest Period,
which amounts shall be in (x) integral multiples of $500,000 and not less than
$1,000,000 for each Borrowing Tranche under the LIBOR Rate Option, and
(y) integral multiples of $500,000 and not less than $500,000 for each Borrowing
Tranche under the Base Rate Option.

2.4.2 Swing Loan Requests. Except as otherwise provided herein, the Borrower may
from time to time prior to the Expiration Date request PNC to make Swing Loans
by delivery to PNC not later than 1:00 p.m. on the proposed Borrowing Date of a
duly completed request therefor substantially in the form of Exhibit 2.4.2
hereto or a request by telephone promptly confirmed in writing by letter,
facsimile or telex (each, a “Swing Loan Request”), it being understood that the
Administrative Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Swing Loan Request shall be irrevocable and shall specify the
proposed Borrowing Date and the principal amount of such Swing Loan, which shall
be not less than $1,000,000.

2.5 Making Revolving Credit Loans and Swing Loans; Presumptions by the
Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay
Swing Loans.

2.5.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly
after receipt by it of a Loan Request pursuant to Section 2.4 [Revolving Credit
Loan Requests; Swing Loan Requests], notify the Lenders of its receipt of such
Loan Request specifying the information provided by the Borrower and the
apportionment among the Lenders

 

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of the requested Revolving Credit Loans as determined by the Administrative
Agent in accordance with Section 2.2 [Nature of Lenders’ Obligations with
Respect to Revolving Credit Loans]. Each Lender shall remit the principal amount
of each Revolving Credit Loan to the Administrative Agent such that the
Administrative Agent is able to, and the Administrative Agent shall, to the
extent the Lenders have made funds available to it for such purpose and subject
to Section 7.2 [Each Loan or Letter of Credit], fund such Revolving Credit Loans
to the Borrower in U.S. Dollars and immediately available funds at the Principal
Office prior to 2:00 p.m., on the applicable Borrowing Date; provided that if
any Lender fails to remit such funds to the Administrative Agent in a timely
manner, the Administrative Agent may elect in its sole discretion to fund with
its own funds the Revolving Credit Loans of such Lender on such Borrowing Date,
and such Lender shall be subject to the repayment obligation in Section 2.5.2
[Presumptions by the Administrative Agent].

2.5.2 Presumptions by the Administrative Agent. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any Loan
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Loan, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.5.1 [Making Revolving Credit Loans] and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Loan
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation and (ii) in the case of a payment to be made by the
Borrower, the interest rate applicable to Loans under the Base Rate Option;
provided, however, that Agent shall first make demand for repayment upon such
Lender prior to making demand on Borrowers. Any payment by the Borrower shall be
without prejudice to any claim the Borrower may have against a Lender that shall
have failed to make such payment to the Administrative Agent.

2.5.3 Making Swing Loans. So long as PNC elects to make Swing Loans, PNC shall,
after receipt by it of a Swing Loan Request pursuant to Section 2.4.2, [Swing
Loan Requests] fund such Swing Loan to the Borrower in U.S. Dollars and
immediately available funds at the Principal Office prior to 4:00 p.m. on the
Borrowing Date.

2.5.4 Repayment of Revolving Credit Loans. The Borrower shall repay the
Revolving Credit Loans together with all outstanding interest thereon on the
Expiration Date.

2.5.5 Borrowings to Repay Swing Loans. PNC may, at its option, exercisable at
any time for any reason whatsoever, demand repayment of the Swing Loans, and
each Lender shall make a Revolving Credit Loan in an amount equal to such
Lender’s Ratable Share of the aggregate principal amount of the outstanding
Swing Loans, plus, if PNC so requests, accrued interest thereon, provided that
no Lender shall be obligated in any event to make Revolving Credit Loans in
excess of its Revolving Credit Commitment minus its Ratable Share of Letter of
Credit Obligations. Revolving Credit Loans made pursuant to the preceding
sentence shall bear interest at the Base Rate Option and shall be deemed to have
been properly requested in

 

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accordance with Section 2.4.1 [Revolving Credit Loan Requests] without regard to
any of the requirements of that provision. PNC shall provide notice to the
Lenders (which may be telephonic or written notice by letter, facsimile or
telex) that such Revolving Credit Loans are to be made under this Section 2.5.5
and of the apportionment among the Lenders, and the Lenders shall be
unconditionally obligated to fund such Revolving Credit Loans (whether or not
the conditions specified in Section 2.4.1 [Revolving Credit Loan Requests] are
then satisfied) by the time PNC so requests, which shall not be earlier than
3:00 p.m. on the Business Day next after the date the Lenders receive such
notice from PNC.

2.5.6 Swing Loans Under Cash Management Agreements. In addition to making Swing
Loans pursuant to the foregoing provisions of Section 2.5.3 [Making Swing
Loans], without the requirement for a specific request from the Borrower
pursuant to Section 2.4.2 [Swing Loan Requests], PNC as the Swing Loan Lender
may make Swing Loans to the Borrower in accordance with the provisions of the
agreements between the Borrower and such Swing Loan Lender relating to the
Borrower’s deposit, sweep and other accounts at such Swing Loan Lender and
related arrangements and agreements regarding the management and investment of
the Borrower’s cash assets as in effect from time to time (the “Cash Management
Agreements”) to the extent of the daily aggregate net negative balance in the
Borrower’s accounts which are subject to the provisions of the Cash Management
Agreements. Swing Loans made pursuant to this Section 2.5.6 in accordance with
the provisions of the Cash Management Agreements shall (i) be subject to the
limitations as to aggregate amount set forth in Section 2.1.2 [Swing Loan
Commitment], (ii) not be subject to the limitations as to individual amount set
forth in Section 2.4.2 [Swing Loan Requests], (iii) be payable by the Borrower,
both as to principal and interest, at the rates and times set forth in the Cash
Management Agreements (but in no event later than the Expiration Date), (iv) not
be made at any time after such Swing Loan Lender has received written notice of
the occurrence of an Event of Default and so long as such shall continue to
exist, or, unless consented to by the Required Lenders, a Potential Default and
so long as such shall continue to exist, (v) if not repaid by the Borrower in
accordance with the provisions of the Cash Management Agreements, be subject to
each Lender’s obligation pursuant to Section 2.5.5 [Borrowings to Repay Swing
Loans], and (vi) except as provided in the foregoing subsections (i) through
(v), be subject to all of the terms and conditions of this Section 2.

2.6 Notes. The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans and Swing Loans made to it by
each Lender, together with interest thereon, shall be evidenced by a revolving
credit Note and a swing Note dated the Closing Date payable to the order of such
Lender in a face amount equal to the Revolving Credit Commitment or Swing Loan
Commitment as applicable, of such Lender.

2.7 Use of Proceeds. The proceeds of the Loans shall be used (i) to pay fees and
expenses relating to this transaction, (ii) for Borrowers’ working capital needs
and capital expenditures and for general corporate purposes, (iii) to finance
Permitted Acquisitions (including fees and expenses related to Permitted
Acquisitions) and (iv) to reimburse drawings under Letters of Credit.

 

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2.8 Letter of Credit Subfacility.

2.8.1 Issuance of Letters of Credit. The Borrower may at any time prior to the
Expiration Date request the issuance of a standby or trade letter of credit
(each a “Letter of Credit”) on behalf of itself or another Loan Party, or the
amendment or extension of an existing Letter of Credit, by delivering or having
such other Loan Party deliver to the Issuing Lender (with a copy to the
Administrative Agent) a completed application and agreement for letters of
credit, or request for such amendment or extension, as applicable, in such form
as the Issuing Lender may specify from time to time by no later than 10:00 a.m.
at least five (5) Business Days, or such shorter period as may be agreed to by
the Issuing Lender, in advance of the proposed date of issuance. Promptly after
receipt of any letter of credit application, the Issuing Lender shall confirm
with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit application
and if not, such Issuing Lender will provide Administrative Agent with a copy
thereof. Unless the Issuing Lender has received notice from any Lender,
Administrative Agent or the Borrower, at least one day prior to the requested
date of issuance, amendment or extension of the applicable Letter of Credit,
that one or more applicable conditions in Section 7 [Conditions of Lending and
Issuance of Letters of Credit] is not satisfied, then, subject to the terms and
conditions hereof and in reliance on the agreements of the other Lenders set
forth in this Section 2.8, the Issuing Lender or any of the Issuing Lender’s
Affiliates will issue a Letter of Credit or agree to such amendment or
extension, provided that each Letter of Credit shall (A) have a maximum maturity
of twelve (12) months from the date of issuance, and (B) in no event expire
later than the Expiration Date and provided further that in no event shall
(i) the Letter of Credit Obligations exceed, at any one time, $20,000,000 (the
“Letter of Credit Sublimit”) or (ii) the Revolving Facility Usage exceed, at any
one time, the Revolving Credit Commitments. Each request by the Borrower for the
issuance, amendment or extension of a Letter of Credit shall be deemed to be a
representation by the Borrower that it shall be in compliance with the preceding
sentence and with Section 7 [Conditions of Lending and Issuance of Letters of
Credit] after giving effect to the requested issuance, amendment or extension of
such Letter of Credit. Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to the beneficiary thereof, the applicable
Issuing Lender will also deliver to Borrower and Administrative Agent a true and
complete copy of such Letter of Credit or amendment.

2.8.2 Letter of Credit Fees. The Borrower shall pay (i) to the Administrative
Agent for the ratable account of the Lenders a fee (the “Letter of Credit Fee”)
equal to the Applicable Letter of Credit Fee Rate, and (ii) to the Issuing
Lender for its own account a fronting fee equal to .125% per annum (in each case
computed on the basis of a year of 360 days and actual days elapsed), which fees
shall be computed on the daily average Letter of Credit Obligations and shall be
payable quarterly in arrears on the first day of each calendar quarter. The
Borrower shall also pay to the Issuing Lender for the Issuing Lender’s sole
account the Issuing Lender’s then in effect customary fees and administrative
expenses payable with respect to the Letters of Credit as the Issuing Lender may
generally charge or incur from time to time in connection with the issuance,
maintenance, amendment (if any), assignment or transfer (if any), negotiation,
and administration of Letters of Credit.

2.8.3 Disbursements, Reimbursement. Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally

 

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agrees to, purchase from the Issuing Lender a participation in such Letter of
Credit and each drawing thereunder in an amount equal to such Lender’s Ratable
Share of the maximum amount available to be drawn under such Letter of Credit
and the amount of such drawing, respectively.

2.8.3.1 In the event of any request for a drawing under a Letter of Credit by
the beneficiary or transferee thereof, the Issuing Lender will promptly notify
the Borrower and the Administrative Agent thereof. Provided that it shall have
received such notice, the Borrower shall reimburse (such obligation to reimburse
the Issuing Lender shall sometimes be referred to as a “Reimbursement
Obligation”) the Issuing Lender prior to 12:00 noon on each date that an amount
is paid by the Issuing Lender under any Letter of Credit (each such date, a
“Drawing Date”) by paying to the Administrative Agent for the account of the
Issuing Lender an amount equal to the amount so paid by the Issuing Lender. In
the event the Borrower fails to reimburse the Issuing Lender (through the
Administrative Agent) for the full amount of any drawing under any Letter of
Credit by 12:00 noon on the Drawing Date, the Administrative Agent will promptly
notify each Lender thereof, and the Borrower shall be deemed to have requested
that Revolving Credit Loans be made by the Lenders under the Base Rate Option to
be disbursed on the Drawing Date under such Letter of Credit, subject to the
amount of the unutilized portion of the Revolving Credit Commitment and subject
to the conditions set forth in Section 7.2 [Each Loan or Letter of Credit] other
than any notice requirements. Any notice given by the Administrative Agent or
Issuing Lender pursuant to this Section 2.8.3.1 may be oral if immediately
confirmed in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.

2.8.3.2 Each Lender shall upon any notice pursuant to Section 2.8.3.1 make
available to the Administrative Agent for the account of the Issuing Lender an
amount in immediately available funds equal to its Ratable Share of the amount
of the drawing, whereupon the participating Lenders shall (subject to
Section 2.8.3 [Disbursement; Reimbursement]) each be deemed to have made a
Revolving Credit Loan under the Base Rate Option to the Borrower in that amount.
If any Lender so notified fails to make available to the Administrative Agent
for the account of the Issuing Lender the amount of such Lender’s Ratable Share
of such amount by no later than 2:00 p.m. on the Drawing Date, then interest
shall accrue on such Lender’s obligation to make such payment, from the Drawing
Date to the date on which such Lender makes such payment (i) at a rate per annum
equal to the Federal Funds Effective Rate during the first three (3) days
following the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Loans under the Revolving Credit Base Rate Option on and after the
fourth day following the Drawing Date. The Administrative Agent and the Issuing
Lender will promptly give notice (as described in Section 2.8.3.1 above) of the
occurrence of the Drawing Date, but failure of the Administrative Agent or the
Issuing Lender to give any such notice on the Drawing Date or in sufficient time
to enable any Lender to effect such payment on such date shall not relieve such
Lender from its obligation under this Section 2.8.3.2.

2.8.3.3 With respect to any unreimbursed drawing that is not converted into
Revolving Credit Loans under the Base Rate Option to the Borrower in whole or in
part as contemplated by Section 2.8.3.1, because of the Borrower’s failure to
satisfy the conditions set forth in Section 7.2 [Each Loan or Letter of Credit]
other than any notice requirements, or for any other reason, the Borrower shall
be deemed to have incurred from the Issuing Lender a borrowing (each a “Letter
of Credit Borrowing”) in the amount of such drawing. Such Letter

 

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of Credit Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the rate per annum applicable to the Revolving Credit
Loans under the Base Rate Option. Each Lender’s payment to the Administrative
Agent for the account of the Issuing Lender pursuant to Section 2.8.3
[Disbursements, Reimbursement] shall be deemed to be a payment in respect of its
participation in such Letter of Credit Borrowing (each a “Participation
Advance”) from such Lender in satisfaction of its participation obligation under
this Section 2.8.3.

2.8.4 Repayment of Participation Advances.

2.8.4.1 Upon (and only upon) receipt by the Administrative Agent for the account
of the Issuing Lender of immediately available funds from the Borrower (i) in
reimbursement of any payment made by the Issuing Lender under the Letter of
Credit with respect to which any Lender has made a Participation Advance to the
Administrative Agent, or (ii) in payment of interest on such a payment made by
the Issuing Lender under such a Letter of Credit, the Administrative Agent on
behalf of the Issuing Lender will pay to each Lender, in the same funds as those
received by the Administrative Agent, the amount of such Lender’s Ratable Share
of such funds, except the Administrative Agent shall retain for the account of
the Issuing Lender the amount of the Ratable Share of such funds of any Lender
that did not make a Participation Advance in respect of such payment by the
Issuing Lender.

2.8.4.2 If the Administrative Agent is required at any time to return to any
Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in
any Insolvency Proceeding, any portion of any payment made by any Loan Party to
the Administrative Agent for the account of the Issuing Lender pursuant to this
Section in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of the Administrative
Agent, forthwith return to the Administrative Agent for the account of the
Issuing Lender the amount of its Ratable Share of any amounts so returned by the
Administrative Agent plus interest thereon from the date such demand is made to
the date such amounts are returned by such Lender to the Administrative Agent,
at a rate per annum equal to the Federal Funds Effective Rate in effect from
time to time.

2.8.5 Documentation. Each Loan Party agrees to be bound by the terms of the
Issuing Lender’s application and agreement for letters of credit and the Issuing
Lender’s written regulations and customary practices relating to letters of
credit, though such interpretation may be different from such Loan Party’s own.
In the event of a conflict between such application or agreement and this
Agreement, this Agreement shall govern. It is understood and agreed that, except
in the case of gross negligence or willful misconduct, the Issuing Lender shall
not be liable for any error, negligence and/or mistakes, whether of omission or
commission, in following any Loan Party’s instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.

2.8.6 Determinations to Honor Drawing Requests. In determining whether to honor
any request for drawing under any Letter of Credit by the beneficiary thereof,
the Issuing Lender shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.

 

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2.8.7 Nature of Participation and Reimbursement Obligations. Each Lender’s
obligation in accordance with this Agreement to make the Revolving Credit Loans
or Participation Advances, as contemplated by Section 2.8.3 [Disbursements,
Reimbursement], as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrower to reimburse the Issuing Lender upon a draw under a
Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.8 under all
circumstances, including the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Issuing Lender or any of its Affiliates, the
Borrower or any other Person for any reason whatsoever, or which any Loan Party
may have against the Issuing Lender or any of its Affiliates, any Lender or any
other Person for any reason whatsoever;

(ii) the failure of any Loan Party or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in Sections 2.1
[Revolving Credit Commitments], 2.4 [Revolving Credit Loan Requests; Swing Loan
Requests], 2.5 [Making Revolving Credit Loans and Swing Loans; Etc.] or 7.2
[Each Loan or Letter of Credit] or as otherwise set forth in this Agreement for
the making of a Revolving Credit Loan, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of the Lenders to make Participation Advances under Section 2.8.3
[Disbursements, Reimbursement];

(iii) any lack of validity or enforceability of any Letter of Credit;

(iv) any claim of breach of warranty that might be made by any Loan Party or any
Lender against any beneficiary of a Letter of Credit, or the existence of any
claim, set-off, recoupment, counterclaim, crossclaim, defense or other right
which any Loan Party or any Lender may have at any time against a beneficiary,
successor beneficiary any transferee or assignee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting),
the Issuing Lender or its Affiliates or any Lender or any other Person, whether
in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between any Loan
Party or Subsidiaries of a Loan Party and the beneficiary for which any Letter
of Credit was procured);

(v) the lack of power or authority of any signer of (or any defect in or forgery
of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
any Letter of Credit, or any fraud or alleged fraud in connection with any
Letter of Credit, or the transport of any property or provision of services
relating to a Letter of Credit, in each case even if the Issuing Lender or any
of its Affiliates has been notified thereof;

(vi) payment by the Issuing Lender or any of its Affiliates under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;

 

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(vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;

(viii) any failure by the Issuing Lender or any of its Affiliates to issue any
Letter of Credit in the form requested by any Loan Party, unless the Issuing
Lender has received written notice from such Loan Party of such failure within
three Business Days after the Issuing Lender shall have furnished such Loan
Party and the Administrative Agent a copy of such Letter of Credit and such
error is material and no drawing has been made thereon prior to receipt of such
notice;

(ix) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Loan Party or
Subsidiaries of a Loan Party;

(x) any breach of this Agreement or any other Loan Document by any party
thereto;

(xi) the occurrence or continuance of an Insolvency Proceeding with respect to
any Loan Party;

(xii) the fact that an Event of Default or a Potential Default shall have
occurred and be continuing;

(xiii) the fact that the Expiration Date shall have passed or this Agreement or
the Commitments hereunder shall have been terminated; and

(xiv) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

2.8.8 Indemnity. The Borrower hereby agrees to protect, indemnify, pay and save
harmless the Issuing Lender and any of its Affiliates that has issued a Letter
of Credit from and against any and all claims, demands, liabilities, damages,
taxes, penalties, interest, judgments, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which the Issuing Lender or any of its Affiliates may
incur or be subject to as a consequence, direct or indirect, of the issuance of
any Letter of Credit, other than as a result of (A) the gross negligence or
willful misconduct of the Issuing Lender as determined by a final non-appealable
judgment of a court of competent jurisdiction or (B) the wrongful dishonor by
the Issuing Lender or any of Issuing Lender’s Affiliates of a proper demand for
payment made under any Letter of Credit, except if such dishonor resulted from
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Official Body.

2.8.9 Liability for Acts and Omissions. As between any Loan Party and the
Issuing Lender, or the Issuing Lender’s Affiliates, such Loan Party assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Lender shall not be responsible for any
of the following, including any losses or damages to any Loan Party or

 

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other Person or property relating therefrom: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for an issuance of any such Letter
of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or
its Affiliates shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any such Letter of Credit, or any other party to which such Letter of Credit may
be transferred, to comply fully with any conditions required in order to draw
upon such Letter of Credit or any other claim of any Loan Party against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the Issuing
Lender or its Affiliates, as applicable, including any act or omission of any
Official Body, and none of the above shall affect or impair, or prevent the
vesting of, any of the Issuing Lender’s or its Affiliates rights or powers
hereunder. Nothing in the preceding sentence shall relieve the Issuing Lender
from liability for the Issuing Lender’s gross negligence or willful misconduct
in connection with actions or omissions described in such clauses (i) through
(viii) of such sentence. In no event shall the Issuing Lender or its Affiliates
be liable to any Loan Party for any indirect, consequential, incidental,
punitive, exemplary or special damages or expenses (including without limitation
attorneys’ fees), or for any damages resulting from any change in the value of
any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, the Issuing Lender and each of
its Affiliates (i) may rely on any oral or other communication believed in good
faith by the Issuing Lender or such Affiliate to have been authorized or given
by or on behalf of the applicant for a Letter of Credit, (ii) may honor any
presentation if the documents presented appear on their face substantially to
comply with the terms and conditions of the relevant Letter of Credit; (iii) may
honor a previously dishonored presentation under a Letter of Credit, whether
such dishonor was pursuant to a court order, to settle or compromise any claim
of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to
the same extent as if such presentation had initially been honored, together
with any interest paid by the Issuing Lender or its Affiliate; (iv) may honor
any drawing that is payable upon presentation of a statement advising
negotiation or payment, upon receipt of such statement (even if such statement
indicates that a draft or other document is being delivered separately), and
shall not be liable for any failure of any such draft or other document to
arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay
any paying or negotiating bank claiming that it rightfully honored under the
laws or practices of the place where such bank is located; and (vi) may settle
or adjust any claim or demand made on the Issuing Lender or its Affiliate in any
way related to any order issued at the applicant’s request to an air carrier, a
letter of guarantee or of indemnity issued to a carrier or any similar document
(each an “Order”) and honor any drawing in connection with any Letter of Credit
that is the subject of such Order, notwithstanding that any drafts or other
documents presented in connection with such Letter of Credit fail to conform in
any way with such Letter of Credit.

 

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In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the Issuing Lender or its
Affiliates under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put the Issuing Lender or its Affiliates under any resulting
liability to the Borrower or any Lender.

2.8.10 Issuing Lender Reporting Requirements. Each Issuing Lender shall, on the
first Business Day of each month, provide to Administrative Agent and Borrower a
schedule of the Letters of Credit issued by it, in form and substance
satisfactory to Administrative Agent, showing the date of issuance of each
Letter of Credit, the account party, the original face amount (if any), and the
expiration date of any Letter of Credit outstanding at any time during the
preceding month, and any other information relating to such Letter of Credit
that the Administrative Agent may request.

2.9 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

(i) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.3 [Commitment Fees];

(ii) the Commitment and outstanding Loans of such Defaulting Lender shall not be
included in determining whether the Required Lenders have taken or may take any
action hereunder (including any consent to any amendment, waiver or other
modification pursuant to Section 11.2 [Modifications, Amendments or Waivers]);
provided, that this clause (ii) shall not apply to the vote of a Defaulting
Lender in the case of an amendment, waiver or other modification that increases
the Commitments of such Lender, provides for an extension of the Expiration Date
for such Lender’s Loans, or alters the definition of Required Lenders;

(iii) if any Swing Loans are outstanding or any Letter of Credit Obligations
exist at the time such Lender becomes a Defaulting Lender, then:

(a) all or any part of the outstanding Swing Loans and Letter of Credit
Obligations of such Defaulting Lender shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Ratable Shares but
only to the extent that (x) the Revolving Facility Usage does not exceed the
total of all non-Defaulting Lenders’ Revolving Credit Commitments, and (y) no
Potential Default or Event of Default has occurred and is continuing at such
time;

(b) if the reallocation described in clause (a) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such outstanding Swing
Loans, and (y) second, cash collateralize for the benefit of the Issuing Lender
the Borrower’s obligations corresponding to such Defaulting Lender’s Letter of
Credit Obligations (after giving effect to any partial reallocation pursuant to
clause (a) above) in a deposit account held at the Administrative Agent for so
long as such Letter of Credit Obligations are outstanding;

 

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(c) if the Borrower cash collateralizes any portion of such Defaulting Lender’s
Letter of Credit Obligations pursuant to clause (b) above, the Borrower shall
not be required to pay any fees to such Defaulting Lender pursuant to
Section 2.8.2 [Letter of Credit Fees] with respect to such Defaulting Lender’s
Letter of Credit Obligations during the period such Defaulting Lender’s Letter
of Credit Obligations are cash collateralized;

(d) if the Letter of Credit Obligations of the non-Defaulting Lenders are
reallocated pursuant to clause (a) above, then the fees payable to the Lenders
pursuant to Section 2.8.2 shall be adjusted in accordance with such
non-Defaulting Lenders’ Ratable Share; and

(e) if all or any portion of such Defaulting Lender’s Letter of Credit
Obligations are neither reallocated nor cash collateralized pursuant to clause
(a) or (b) above, then, without prejudice to any rights or remedies of the
Issuing Lender or any other Lender hereunder, all Letter of Credit Fees payable
under Section 2.8.2 with respect to such Defaulting Lender’s Letter of Credit
Obligations shall be payable to the Issuing Lender (and not to such Defaulting
Lender) until and to the extent that such Letter of Credit Obligations are
reallocated and/or cash collateralized; and

(iv) so long as such Lender is a Defaulting Lender, PNC shall not be required to
fund any Swing Loans and the Issuing Lender shall not be required to issue,
amend or increase any Letter of Credit, unless such Issuing Lender is satisfied
that the related exposure and the Defaulting Lender’s then outstanding Letter of
Credit Obligations will be 100% covered by the Revolving Credit Commitments of
the non-Defaulting Lenders and/or cash collateral will be provided by the
Borrower in accordance with Section 2.9(iii), and participating interests in any
newly made Swing Loan or any newly issued or increased Letter of Credit shall be
allocated among non-Defaulting Lenders in a manner consistent with
Section 2.9(iii)(a) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to any Lender shall occur following the
date hereof and for so long as such event shall continue, or (ii) PNC or the
Issuing Lender has a good faith belief that any Lender has defaulted in
fulfilling its obligations under one or more other agreements in which such
Lender commits to extend credit, PNC shall not be required to fund any Swing
Loan and the Issuing Lender shall not be required to issue, amend or increase
any Letter of Credit, unless PNC or the Issuing Lender, as the case may be,
shall have entered into arrangements with the Borrower or such Lender,
satisfactory to PNC or the Issuing Lender, as the case may be, to defease any
risk to it in respect of such Lender hereunder. The rights and remedies against
a Defaulting Lender under this Section 2.9 are in addition to other rights and
remedies which the Borrower may have against such Defaulting Lender and which
the Administrative Agent or any Lender may have against such Defaulting Lender
in each case under applicable Law.

In the event that the Administrative Agent, the Borrower, PNC and the Issuing
Lender agree in writing that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the
Administrative Agent will so notify the parties hereto, and the Ratable Share of
the Swing Loans and Letter of Credit Obligations of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment, and on such
date such Lender

 

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shall purchase at par such of the Loans of the other Lenders (other than Swing
Loans) as the Administrative Agent shall determine may be necessary in order for
such Lender to hold such Loans in accordance with its Ratable Share.

2.10 Increase in Revolving Credit Commitments.

2.10.1 Increasing Lenders and New Lenders. The Borrower may, at any time and
from time to time, request that (1) the current Lenders increase their Revolving
Credit Commitments (any current Lender which elects to increase its Revolving
Credit Commitment shall be referred to as an “Increasing Lender”) or (2) one or
more new lenders (each a “New Lender”) join this Agreement and provide a
Revolving Credit Commitment hereunder, subject to the following terms and
conditions:

(i) No Obligation to Increase. No current Lender shall be obligated to increase
its Revolving Credit Commitment and any increase in the Revolving Credit
Commitment by any current Lender shall be in the sole discretion of such current
Lender.

(ii) Defaults. There shall exist no Events of Default or Potential Default on
the effective date of such increase after giving effect to such increase.

(iii) Aggregate Revolving Credit Commitments. After giving effect to such
increase, the total Revolving Credit Commitments shall not exceed $100,000,000.

(iv) Resolutions; Opinion. The Loan Parties shall deliver to the Administrative
Agent on or before the effective date of such increase the following documents
in a form reasonably acceptable to the Administrative Agent: (1) certifications
of their corporate secretaries with attached resolutions certifying that the
increase in the Revolving Credit Commitment has been approved by such Loan
Parties, and (2) an opinion of counsel addressed to the Administrative Agent and
the Lenders addressing the authorization and execution of the Loan Documents by,
and enforceability of the Loan Documents against, the Loan Parties.

(v) Notes. The Borrowers shall execute and deliver (1) to each Increasing Lender
a replacement revolving credit Note reflecting the new amount of such Increasing
Lender’s Revolving Credit Commitment after giving effect to the increase (and
the prior Note issued to such Increasing Lender shall be deemed to be
terminated) and (2) to each New Lender a revolving credit Note reflecting the
amount of such New Lender’s Revolving Credit Commitment.

(vi) Approval of New Lenders. Any New Lender shall be subject to the approval of
the Administrative Agent (provided that such approval shall not be unreasonably
withheld, conditioned or delayed).

(vii) Increasing Lenders. Each Increasing Lender shall confirm its agreement to
increase its Revolving Credit Commitment pursuant to an acknowledgement in a
form acceptable to the Administrative Agent, signed by it and the Borrower and
delivered to the Administrative Agent at least five (5) calendar days before the
effective date of such increase.

 

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(viii) New Lenders—Joinder. Each New Lender shall execute a joinder agreement in
form and substance satisfactory to Administrative Agent pursuant to which such
New Lender shall join and become a party to this Agreement and the other Loan
Documents with a Revolving Credit Commitment in the amount set forth in such
lender joinder.

2.11 Reduction of Revolving Credit Commitment. The Borrowers shall have the
right at any time after the Closing Date upon five (5) calendar days’ prior
written notice to the Administrative Agent (or such shorter period of time
agreed to by the Administrative Agent) to permanently reduce (ratably among the
Lenders in proportion to their Ratable Shares) the Revolving Credit Commitments,
in a minimum amount of $500,000 and whole multiples of $500,000, or to terminate
completely the Revolving Credit Commitments, without penalty or premium except
as set forth herein, including without limitation, in Section 5.6.2 [Replacement
of a Lender], Section 5.8 [Increased Costs] and Section 5.10 [Indemnity];
provided that any such reduction or termination shall be accompanied by
prepayment of the Notes, together with outstanding Commitment Fees, and the full
amount of interest accrued on the principal sum to be prepaid (and all amounts
referred to in Section 5.10 [Indemnity] hereof) to the extent necessary to cause
the aggregate Revolving Facility Usage after giving effect to such prepayments
to be equal to or less than the Revolving Credit Commitments as so reduced or
terminated. Any notice to reduce the Revolving Credit Commitments under this
Section 2.11 shall be irrevocable; provided that a notice of termination of all
Revolving Credit Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.

3. RESERVED

4. INTEREST RATES

4.1 Interest Rate Options. The Borrower shall pay interest in respect of the
outstanding unpaid principal amount of the Loans as selected by it from the Base
Rate Option or LIBOR Rate Option set forth below applicable to the Loans, it
being understood that, subject to the provisions of this Agreement, the Borrower
may select different Interest Rate Options and different Interest Periods to
apply simultaneously to the Loans comprising different Borrowing Tranches and
may convert to or renew one or more Interest Rate Options with respect to all or
any portion of the Loans comprising any Borrowing Tranche; provided that there
shall not be at any one time outstanding more than five (5) Borrowing Tranches
in the aggregate among all of the Loans and provided further that if an Event of
Default or Potential Default exists and is continuing, the Borrower may not
request, convert to, or renew the LIBOR Rate Option for any Loans and the
Required Lenders may demand that all existing Borrowing Tranches bearing
interest under the LIBOR Rate Option shall be converted immediately to the Base
Rate Option, subject to the obligation of the Borrower to pay any indemnity
under Section 5.10 [Indemnity] in connection with such conversion. If at any
time the designated rate applicable to any Loan made by any Lender exceeds such
Lender’s highest lawful rate, the rate of interest on such Lender’s Loan shall
be limited to such Lender’s highest lawful rate.

 

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4.1.1 Revolving Credit Interest Rate Options; Swing Line Interest Rate. The
Borrower shall have the right to select from the following Interest Rate Options
applicable to the Revolving Credit Loans:

(i) Revolving Credit Base Rate Option: A fluctuating rate per annum (computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate
to change automatically from time to time effective as of the effective date of
each change in the Base Rate; or

(ii) Revolving Credit LIBOR Rate Option: A rate per annum (computed on the basis
of a year of 360 days and actual days elapsed) equal to the LIBOR Rate plus the
Applicable Margin.

Subject to Section 4.3 [Interest After Default], only the Base Rate Option
applicable to Revolving Credit Loans shall apply to the Swing Loans.

4.1.2 [RESERVED]

4.1.3 Rate Quotations. The Borrower may call the Administrative Agent on or
before the date on which a Loan Request is to be delivered to receive an
indication of the rates then in effect, but it is acknowledged that such
projection shall not be binding on the Administrative Agent or the Lenders nor
affect the rate of interest which thereafter is actually in effect when the
election is made.

4.2 Interest Periods. At any time when the Borrower shall select, convert to or
renew a LIBOR Rate Option, the Borrower shall notify the Administrative Agent
thereof at least three (3) Business Days prior to the effective date of such
LIBOR Rate Option by delivering a Loan Request. The notice shall specify an
Interest Period during which such Interest Rate Option shall apply.
Notwithstanding the preceding sentence, the following provisions shall apply to
any selection of, renewal of, or conversion to a LIBOR Rate Option:

4.2.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under the
LIBOR Rate Option shall be in integral multiples of $500,000 and not less than
$1,000,000 and

4.2.2 Renewals. In the case of the renewal of a LIBOR Rate Option at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period, without duplication in payment of interest
for such day.

4.3 Interest After Default. To the extent permitted by Law, upon the occurrence
of an Event of Default and until such time such Event of Default shall have been
cured or waived, and at the discretion of the Administrative Agent or upon
written demand by the Required Lenders to the Administrative Agent:

4.3.1 Letter of Credit Fees, Interest Rate. The Letter of Credit Fees and the
rate of interest for each Loan otherwise applicable pursuant to Section 2.8.2
[Letter of Credit Fees] or Section 4.1 [Interest Rate Options], respectively,
shall be increased by 2.0% per annum;

 

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4.3.2 Other Obligations. Each other Obligation hereunder if not paid when due
shall bear interest at a rate per annum equal to the sum of the rate of interest
applicable under the Revolving Credit Base Rate Option plus an additional
2.0% per annum from the time such Obligation becomes due and payable and until
it is paid in full; and

4.3.3 Acknowledgment. The Borrower acknowledges that the increase in rates
referred to in this Section 4.3 reflects, among other things, the fact that such
Loans or other amounts have become a substantially greater risk given their
default status and that the Lenders are entitled to additional compensation for
such risk; and all such interest shall be payable by Borrower upon demand by
Administrative Agent.

4.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available.

4.4.1 Unascertainable. If on any date on which a LIBOR Rate would otherwise be
determined, the Administrative Agent shall have determined that:

(i) adequate and reasonable means do not exist for ascertaining such LIBOR Rate,
or

(ii) a contingency has occurred which materially and adversely affects the
London interbank eurodollar market relating to the LIBOR Rate, the
Administrative Agent shall have the rights specified in Section 4.4.3
[Administrative Agent’s and Lender’s Rights].

4.4.2 Illegality; Increased Costs; Deposits Not Available. If at any time any
Lender shall have determined that:

(i) the making, maintenance or funding of any Loan to which a LIBOR Rate Option
applies has been made impracticable or unlawful by compliance by such Lender in
good faith with any Law or any interpretation or application thereof by any
Official Body or with any request or directive of any such Official Body
(whether or not having the force of Law), or

(ii) such LIBOR Rate Option will not adequately and fairly reflect the cost to
such Lender of the establishment or maintenance of any such Loan, or

(iii) after making all reasonable efforts, deposits of the relevant amount in
Dollars for the relevant Interest Period for a Loan, or to banks generally, to
which a LIBOR Rate Option applies, respectively, are not available to such
Lender with respect to such Loan, or to banks generally, in the interbank
eurodollar market, then the Administrative Agent shall have the rights specified
in Section 4.4.3 [Administrative Agent’s and Lender’s Rights].

4.4.3 Administrative Agent’s and Lender’s Rights. In the case of any event
specified in Section 4.4.1 [Unascertainable] above, the Administrative Agent
shall promptly so notify the Lenders and the Borrower thereof, and in the case
of an event specified in Section 4.4.2 [Illegality; Increased Costs; Deposits
Not Available] above, such Lender shall promptly so notify the Administrative
Agent and endorse a certificate to such notice as to the specific circumstances
of such notice, and the Administrative Agent shall promptly send copies of such
notice and certificate to the other Lenders and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the

 

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obligation of (A) the Lenders, in the case of such notice given by the
Administrative Agent, or (B) such Lender, in the case of such notice given by
such Lender, to allow the Borrower to select, convert to or renew a LIBOR Rate
Option shall be suspended until the Administrative Agent shall have later
notified the Borrower, or such Lender shall have later notified the
Administrative Agent, of the Administrative Agent’s or such Lender’s, as the
case may be, determination that the circumstances giving rise to such previous
determination no longer exist. If at any time the Administrative Agent makes a
determination under Section 4.4.1 [Unascertainable] and the Borrower has
previously notified the Administrative Agent of its selection of, conversion to
or renewal of a LIBOR Rate Option and such Interest Rate Option has not yet gone
into effect, such notification shall be deemed to provide for selection of,
conversion to or renewal of the Base Rate Option otherwise available with
respect to such Loans. If any Lender notifies the Administrative Agent of a
determination under Section 4.4.2 [Illegality; Increased Costs; Deposits Not
Available], the Borrower shall, subject to the Borrower’s indemnification
Obligations under Section 5.10 [Indemnity], as to any Loan of the Lender to
which a LIBOR Rate Option applies, on the date specified in such notice either
convert such Loan to the Base Rate Option otherwise available with respect to
such Loan or prepay such Loan in accordance with Section 5.6 [Voluntary
Prepayments]. Absent due notice from the Borrower of conversion or prepayment,
such Loan shall automatically be converted to the Base Rate Option otherwise
available with respect to such Loan upon such specified date.

4.5 Selection of Interest Rate Options. If the Borrower fails to select a new
Interest Period to apply to any Borrowing Tranche of Loans under the LIBOR Rate
Option at the expiration of an existing Interest Period applicable to such
Borrowing Tranche in accordance with the provisions of Section 4.2 [Interest
Periods], the Borrower shall be deemed to have converted such Borrowing Tranche
to the Base Rate Option commencing upon the last day of the existing Interest
Period.

5. PAYMENTS

5.1 Payments. All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Administrative Agent’s Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
1:00 p.m. on the date when due without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Borrower, and without
set-off, counterclaim or other deduction of any nature, and an action therefor
shall immediately accrue. Such payments shall be made to the Administrative
Agent at the Principal Office for the account of PNC with respect to the Swing
Loans and for the ratable accounts of the Lenders with respect to the Revolving
Credit Loans in U.S. Dollars and in immediately available funds, and the
Administrative Agent shall promptly distribute such amounts to the Lenders in
immediately available funds; provided that in the event payments are received by
1:00 p.m. by the Administrative Agent with respect to the Loans and such
payments are not distributed to the Lenders on the same day received by the
Administrative Agent, the Administrative Agent shall pay the Lenders the Federal
Funds Effective Rate with respect to the amount of such payments for each day
held by the Administrative Agent and not distributed to the Lenders. The
Administrative Agent’s and each Lender’s statement of account, ledger or other
relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Loans and other
amounts owing under this Agreement and shall be deemed an “account stated.”

 

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5.2 Pro Rata Treatment of Lenders. Each borrowing of Revolving Credit Loans
shall be allocated to each Lender according to its Ratable Share, and each
selection of, conversion to or renewal of any Interest Rate Option and each
payment or prepayment by the Borrower with respect to principal, interest,
Commitment Fees and Letter of Credit Fees (but excluding the Administrative
Agent’s Fee and the Issuing Lender’s fronting fee) shall (except as otherwise
may be provided with respect to a Defaulting Lender and except as provided in
Section 4.4.3 [Administrative Agent’s and Lender’s Rights] in the case of an
event specified in Section 4.4 [LIBOR Rate Unascertainable; Etc.], 5.6.2
[Replacement of a Lender] or 5.8 [Increased Costs]) be payable ratably among the
Lenders entitled to such payment in accordance with the amount of principal,
interest, Commitment Fees, Facility Fees and Letter of Credit Fees, as set forth
in this Agreement. Notwithstanding any of the foregoing, each borrowing or
payment or prepayment by the Borrower of principal, interest, fees or other
amounts from the Borrower with respect to Swing Loans shall be made by or to PNC
according to Section 2.5.5 [Borrowings to Repay Swing Loans].

5.3 Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of setoff, counterclaim or banker’s lien, by receipt of voluntary payment, by
realization upon security, or by any other non-pro rata source, obtain payment
in respect of any principal of or interest on any of its Loans or other
obligations hereunder resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of its Loans and accrued interest thereon or
other such obligations greater than the pro-rata share of the amount such Lender
is entitled thereto, then the Lender receiving such greater proportion shall
(a) notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Loans and such other obligations of the other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by Law (including court order) to be
paid by the Lender or the holder making such purchase; and

(ii) the provisions of this Section 5.3 shall not be construed to apply to
(x) any payment made by the Loan Parties pursuant to and in accordance with the
express terms of the Loan Documents or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or Participation Advances to any assignee or participant, other than to
the Borrower or any Subsidiary thereof (as to which the provisions of this
Section 5.3 shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Loan Party rights of setoff and counterclaim with respect to such participation
but without duplication as fully as if such Lender were a direct creditor of
each Loan Party in the amount of such participation.

 

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5.4 Presumptions by Administrative Agent. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or the Issuing
Lender hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Lender, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Lender, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or the Issuing Lender, with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

5.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option
applies shall be due and payable in arrears on each Payment Date. Interest on
Loans to which the LIBOR Rate Option applies shall be due and payable on the
last day of each Interest Period for those Loans. Interest on mandatory
prepayments of principal under Section 5.7 [Mandatory Prepayments] shall be due
on the date such mandatory prepayment is due. Interest on the principal amount
of each Loan or other monetary Obligation shall be due and payable on demand
after such principal amount or other monetary Obligation becomes due and payable
(whether on the stated Expiration Date, upon acceleration or otherwise).

5.6 Voluntary Prepayments.

5.6.1 Right to Prepay. The Borrower shall have the right at its option from time
to time to prepay the Loans in whole or part without premium or penalty (except
as provided in Section 5.6.2 [Replacement of a Lender] below, in Section 5.8
[Increased Costs] and Section 5.10 [Indemnity]). Whenever the Borrower desires
to prepay any part of the Loans, it shall provide a prepayment notice to the
Administrative Agent by 1:00 p.m. at least one (1) Business Day prior to the
date of prepayment of the Revolving Credit Loans or no later than 1:00 p.m. on
the date of prepayment of Swing Loans, setting forth the following information:

(w) the date, which shall be a Business Day, on which the proposed prepayment is
to be made;

(x) a statement indicating the application of the prepayment between the
Revolving Credit Loans and Swing Loans;

(y) a statement indicating the application of the prepayment between Loans to
which the Base Rate Option applies and Loans to which the LIBOR Rate Option
applies; and

(z) the total principal amount of such prepayment, which shall not be less than
the lesser of (i) the Revolving Facility Usage or (ii) $500,000 for any Swing
Loan or $500,000 for any Revolving Credit Loan.

All prepayment notices shall be irrevocable; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
all Revolving

 

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Credit Commitments as contemplated by Section 2.11 [Reduction of Revolving
Credit Commitment], then such notice of prepayment may be revoked if such notice
of termination is revoked in accordance with Section 2.11 [Reduction of
Revolving Credit Commitment]. The principal amount of the Loans for which a
prepayment notice is given, together with interest on such principal amount
except with respect to Loans to which the Base Rate Option applies, shall be due
and payable on the date specified in such prepayment notice as the date on which
the proposed prepayment is to be made. Except as provided in Section 4.4.3
[Administrative Agent’s and Lender’s Rights], if the Borrower prepays a Loan but
fails to specify the applicable Borrowing Tranche which the Borrower is
prepaying, the prepayment shall be applied first to Loans to which the Base Rate
Option applies, then to Loans to which the LIBOR Rate Option applies. Any
prepayment hereunder shall be subject to the Borrower’s Obligation to indemnify
the Lenders under Section 5.10 [Indemnity].

5.6.2 Replacement of a Lender. In the event any Lender (i) gives notice under
Section 4.4 [LIBOR Rate Unascertainable, Etc.], (ii) requests compensation under
Section 5.8 [Increased Costs], or requires the Borrower to pay any Indemnified
Taxes or additional amount to any Lender or any Official Body for the account of
any Lender pursuant to Section 5.9 [Taxes], (iii) is a Defaulting Lender,
(iv) becomes subject to the control of an Official Body (other than normal and
customary supervision), or (v) is a Non-Consenting Lender referred to in
Section 11.2 [Modifications, Amendments or Waivers], then in any such event the
Borrower may, at its sole expense, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.9 [Successors and Assigns]), all of its
interests, rights (other than existing rights to payments pursuant to Sections
5.8 [Increased Costs] or 5.9 [Taxes]) and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 11.9 [Successors and Assigns];

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and Participation Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 5.10 [Indemnity])
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 5.8.1 [Increased Costs Generally] or payments required to be made
pursuant to Section 5.9 [Taxes], such assignment will result in a reduction in
such compensation or payments thereafter; and

(iv) such assignment does not conflict with applicable Law.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

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5.7 Mandatory Prepayments.

5.7.1 Sale of Assets. Within five (5) Business Days (or upon receipt if later,
but in no event to exceed seventy five (75) after receipt) of any sale of assets
authorized by Sections 8.2.7(iv), (v) and (vii) [Disposition of Assets or
Subsidiaries], the Borrower shall make a mandatory prepayment of principal on
the Revolving Loans equal to the sum of the after-tax proceeds (as estimated in
good faith by the Borrower) less any reasonable commissions and other reasonable
and customary transaction costs, fees and expenses properly attributable to such
sales, subject to Borrowers’ ability to reborrow Revolving Loans in accordance
with the terms of the Agreement.

5.7.2 Application Among Interest Rate Options. All prepayments required pursuant
to this Section 5.7 shall first be applied among the Interest Rate Options to
the principal amount of the Loans subject to the Base Rate Option, then to Loans
subject to a LIBOR Rate Option. In accordance with Section 5.10 [Indemnity], the
Borrower shall indemnify the Lenders for any loss or expense, including loss of
margin, incurred with respect to any such prepayments applied against Loans
subject to a LIBOR Rate Option on any day other than the last day of the
applicable Interest Period.

5.8 Increased Costs.

5.8.1 Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the LIBOR Rate) or the Issuing
Lender;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (ii) through (iv) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender, the Issuing Lender or the London interbank market
any other condition, cost or expense (other than Taxes) affecting this Agreement
or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to increase the cost to such Lender, the Issuing Lender or such other Recipient
of participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender, the
Issuing Lender or other Recipient hereunder (whether of principal, interest or
any other amount) then, upon request of such Lender, the Issuing Lender or other
Recipient, the Borrower will pay to such Lender, the Issuing Lender or other
Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Lender, as the case may be, for such
additional costs incurred or reduction suffered.

 

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5.8.2 Capital Requirements. If any Lender or the Issuing Lender determines that
any Change in Law affecting such Lender or the Issuing Lender or any lending
office of such Lender or such Lender’s or the Issuing Lender’s holding company,
if any, regarding capital or liquidity requirements has or would have the effect
of reducing the rate of return on such Lender’s or the Issuing Lender’s capital
or on the capital of such Lender’s or the Issuing Lender’s holding company, if
any, as a consequence of this Agreement, the Commitments of such Lender or the
Loans made by, or participations in Letters of Credit or Swing Loans held by,
such Lender, or the Letters of Credit issued by the Issuing Lender, to a level
below that which such Lender or the Issuing Lender or such Lender’s or the
Issuing Lender’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or the Issuing Lender’s policies and
the policies of such Lender’s or the Issuing Lender’s holding company with
respect to capital adequacy), then from time to time the Borrower will pay to
such Lender or the Issuing Lender, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Lender or such Lender’s or
the Issuing Lender’s holding company for any such reduction suffered.

5.8.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing
of New Loans. A certificate of a Lender or the Issuing Lender setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Lender or
its holding company, as the case may be, as specified in Sections 5.8.1
[Increased Costs Generally] or 5.8.2 [Capital Requirements] and delivered to the
Borrower shall be conclusive absent manifest error. The Borrower shall pay such
Lender or the Issuing Lender, as the case may be, the amount shown as due on any
such certificate within ten (10) days after receipt thereof.

5.8.4 Delay in Requests. Failure or delay on the part of any Lender or the
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or the Issuing Lender’s right to demand
such compensation, provided that the Borrower shall not be required to
compensate a Lender or the Issuing Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than one hundred eighty
(180) calendar days prior to the date that such Lender or the Issuing Lender, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Lender’s
intention to claim compensation therefor (except that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the one
hundred eighty (180) calendar day period referred to above shall be extended to
include the period of retroactive effect thereof).

5.9 Taxes.

5.9.1 Issuing Lender. For purposes of this Section 5.9, the term “Lender”
includes the Issuing Lender.

5.9.2 Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be without deduction
or withholding for any Taxes, except as required by applicable Law. If any
applicable Law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall

 

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timely pay the full amount deducted or withheld to the relevant Official Body in
accordance with applicable Law and, if such Tax is an Indemnified Tax, then the
sum payable by the applicable Loan Party shall be increased as necessary so that
after such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5.9
[Taxes]) the applicable Recipient receives an amount equal to the sum it would
have received had no such deduction or withholding been made.

5.9.3 Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Official Body in accordance with applicable Law, or at the
option of the Administrative Agent timely reimburse it for the payment of, any
Other Taxes.

5.9.4 Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Recipient, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section 5.9
[Taxes]) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient and any reasonable and documented
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Official Body. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender (with a copy to the Administrative Agent),
or by the Administrative Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.

5.9.5 Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of any of the Loan Parties
to do so), (ii) any Taxes attributable to such Lender’s failure to comply with
the provisions of Section 11.9.4 [Participations] relating to the maintenance of
a Participant Register, and (iii) any Excluded Taxes attributable to such
Lender, in each case, that are payable or paid by the Administrative Agent in
connection with any Loan Document, and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the relevant Official Body. A certificate as to the
amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under any Loan Document or otherwise
payable by the Administrative Agent to the Lender from any other source against
any amount due to the Administrative Agent under this Section 5.9.5
[Indemnification by the Lenders].

5.9.6 Evidence of Payments. As soon as practicable after any payment of Taxes by
any Loan Party to an Official Body pursuant to this Section 5.9 [Taxes], such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Official Body evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

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5.9.7 Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 5.9.7(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person.

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(ii) executed originals of IRS Form W-8ECI;

 

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(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit 5.9.7(A) to the effect that such Foreign
Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(iv) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit 5.9.7(B) or
Exhibit 5.9.7(C), IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit 5.9.7(D) on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by applicable Law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable Law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

Upon reasonable request of the Borrower or the Administrative Agent, any Lender
shall update any form or certification previously delivered pursuant to this
Section 5.9.7. Each Lender agrees that if any form or certification it
previously delivered expires or becomes obsolete or inaccurate in any respect,
it shall update such form or certification or promptly (and in any event within
twenty (20) calendar days after such expiration, obsolescence or inaccuracy)
notify the Borrower and the Administrative Agent in writing of its legal
inability to do so.

 

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5.9.8 Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5.9 [Taxes]
(including by the payment of additional amounts pursuant to this Section 5.9
[Taxes]), it shall pay to the indemnifying party an amount equal to such refund
(but only to the extent of indemnity payments made under this Section 5.9
[Taxes] with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Official Body with
respect to such refund). Such indemnifying party, upon the request of such
indemnified party incurred in connection with obtaining such refund, shall repay
to such indemnified party the amount paid over pursuant to this Section 5.9.8
[Treatment of Certain Refunds] (plus any penalties, interest or other charges
imposed by the relevant Official Body) in the event that such indemnified party
is required to repay such refund to such Official Body. Notwithstanding anything
to the contrary in this Section 5.9.8 [Treatment of Certain Refunds]), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 5.9.8 [Treatment of Certain Refunds]
the payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

5.9.9 Survival. Each party’s obligations under this Section 5.9 [Taxes] shall
survive the resignation of the Administrative Agent or any assignment of rights
by, or the replacement of, a Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all Obligations.

5.10 Indemnity. In addition to the compensation or payments required by
Section 5.8 [Increased Costs]or Section 5.9 [Taxes], the Borrower shall
indemnify each Lender against all liabilities, losses or expenses (including
loss of anticipated profits, any foreign exchange losses and any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan, from fees payable to terminate the deposits from which such funds
were obtained or from the performance of any foreign exchange contract) which
such Lender sustains or incurs as a consequence of any:

(i) payment, prepayment, conversion or renewal of any Loan to which a LIBOR Rate
Option applies on a day other than the last day of the corresponding Interest
Period (whether or not such payment or prepayment is mandatory, voluntary or
automatic and whether or not such payment or prepayment is then due),

(ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices
or otherwise) in whole or part any Loan Requests under Section 2.4 [Revolving
Credit Loan Requests; Swing Loan Requests] or Section 4.2 [Interest Periods] or
notice relating to prepayments under Section 5.6 [Voluntary Prepayments], or

 

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(iii) default by the Borrower in the performance or observance of any covenant
or condition contained in this Agreement or any other Loan Document, including
any failure of the Borrower to pay when due (by acceleration or otherwise) any
principal, interest, Commitment Fee or any other amount due hereunder.

If any Lender sustains or incurs any such loss or expense, it shall promptly
upon knowledge of such loss or expense notify the Borrower of the amount
determined in good faith by such Lender (which determination may include such
assumptions, allocations of costs and expenses and averaging or attribution
methods as such Lender shall deem reasonable) to be necessary to indemnify such
Lender for such loss or expense. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and payable by
the Borrower to such Lender ten (10) Business Days after such notice is given.

5.11 Settlement Date Procedures. In order to minimize the transfer of funds
between the Lenders and the Administrative Agent, the Borrower may borrow, repay
and reborrow Swing Loans and PNC may make Swing Loans as provided in
Section 2.1.2 [Swing Loan Commitments] hereof during the period between
Settlement Dates. The Administrative Agent shall notify each Lender of its
Ratable Share of the total of the Revolving Credit Loans and the Swing Loans
(each a “Required Share”). On such Settlement Date, each Lender shall pay to the
Administrative Agent the amount equal to the difference between its Required
Share and its Revolving Credit Loans, and the Administrative Agent shall pay to
each Lender its Ratable Share of all payments made by the Borrower to the
Administrative Agent with respect to the Revolving Credit Loans. The
Administrative Agent shall also effect settlement in accordance with the
foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans
and on Mandatory Prepayment Dates and may at its option effect settlement on any
other Business Day. These settlement procedures are established solely as a
matter of administrative convenience, and nothing contained in this Section 5.11
shall relieve the Lenders of their obligations to fund Revolving Credit Loans on
dates other than a Settlement Date pursuant to Section 2.1.2 [Swing Loan
Commitment]. The Administrative Agent may at any time at its option for any
reason whatsoever require each Lender to pay immediately to the Administrative
Agent such Lender’s Ratable Share of the outstanding Revolving Credit Loans and
each Lender may at any time require the Administrative Agent to pay immediately
to such Lender its Ratable Share of all payments made by the Borrower to the
Administrative Agent with respect to the Revolving Credit Loans.

5.12 Mitigation Obligations. If any Lender requests compensation under
Section 5.8, or the Borrower is required to pay any additional amount to any
Lender or any Official Body for the account of any Lender pursuant to
Section 5.9, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or materially reduce amounts payable pursuant to
Section 5.8 or 5.9, as the case may be, in the future, (ii) would not subject
such Lender to any unreimbursed cost or expense, (iii) would not otherwise be
disadvantageous to such Lender in any material respect and (iv) would not
require such Lender to take any action inconsistent with its internal policies
or legal or regulatory restrictions. The Borrower hereby agrees to pay all
reasonable and documented costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

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6. REPRESENTATIONS AND WARRANTIES

6.1 Representations and Warranties. The Loan Parties, jointly and severally,
represent and warrant to the Administrative Agent and each of the Lenders as
follows:

6.1.1 Organization and Qualification; Power and Authority; Compliance With Laws;
Title to Properties; Event of Default. Each Loan Party and each Subsidiary of
each Loan Party (i) is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, (ii) has the lawful power to
own or lease its properties and to engage in the business it presently conducts
or proposes to conduct, (iii) is duly licensed or qualified and in good standing
in each jurisdiction listed on Schedule 6.1.1 and in all other jurisdictions
where the property owned or leased by it or the nature of the business
transacted by it or both makes such licensing or qualification necessary, except
where the failure to be so licensed or qualified would not constitute a Material
Adverse Change, (iv) has full power to enter into, execute, deliver and carry
out this Agreement and the other Loan Documents to which it is a party, to incur
the Indebtedness contemplated by the Loan Documents and to perform its
Obligations under the Loan Documents to which it is a party, and all such
actions have been duly authorized by all necessary proceedings on its part,
(v) is in compliance in all material respects with all applicable Laws (other
than Environmental Laws which are specifically addressed in Section 6.1.14
[Environmental Matters]) in all jurisdictions in which any Loan Party or
Subsidiary of any Loan Party is presently or will be doing business except where
the failure to do so would not constitute a Material Adverse Change, and
(vi) has good and valid title to or valid leasehold interest in all properties,
assets and other rights which it purports to own or lease or which are reflected
as owned or leased on its books and records, free and clear of all Liens and
encumbrances except Permitted Liens. No Event of Default or Potential Default
exists or is continuing.

6.1.2 Subsidiaries and Owners; Investment Companies. Schedule 6.1.2 states
(i) the name of each of the Borrower’s Subsidiaries, its jurisdiction of
organization and the amount, percentage and type of equity interests in such
Subsidiary (the “Subsidiary Equity Interests”), (ii) the name of each holder of
an equity interest in the Borrower (other than Crocs) and the amount, percentage
and type of such equity interest (the “Borrower Equity Interests”), and
(iii) any options, warrants or other rights outstanding to purchase any such
equity interests referred to in clause (i) or (ii) (collectively the “Equity
Interests”). The Borrower and each Subsidiary of the Borrower has good and valid
title to all of the Subsidiary Equity Interests it purports to own, free and
clear in each case of any Lien (other than restrictions on transfer arising
under securities laws applicable to securities generally) and all such
Subsidiary Equity Interests have been validly issued, fully paid and
nonassessable. None of the Loan Parties or Subsidiaries of any Loan Party is an
“investment company” registered or required to be registered under the
Investment Company Act of 1940 or under the “control” of an “investment company”
as such terms are defined in the Investment Company Act of 1940.

6.1.3 Validity and Binding Effect. This Agreement and each of the other Loan
Documents (i) has been duly and validly executed and delivered by each Loan
Party, and (ii) constitutes, or will constitute, legal, valid and binding
obligations of each Loan Party which is or will be a party thereto, enforceable
against such Loan Party in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

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6.1.4 No Conflict; Material Agreements; Consents. Neither the execution and
delivery of this Agreement or the other Loan Documents by any Loan Party nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by any of them will conflict
with, constitute a default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents of any Loan Party or
(ii) any Law or any material agreement or instrument or order, writ, judgment,
injunction or decree to which any Loan Party or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound or to which it is
subject, or result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan
Party or any of its Subsidiaries (other than Liens granted under the Loan
Documents). There is no default under such material agreement (referred to
above) and none of the Loan Parties or their Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any organization
document, or any requirement of Law, in each case, which would result in a
Material Adverse Change. No consent, approval, exemption, order or authorization
of, or a registration or filing with, any Official Body or any other Person is
required by any Law or any agreement in connection with the execution, delivery
and carrying out of this Agreement and the other Loan Documents, except filings
required to perfect security interests granted in the Loan Documents.

6.1.5 Litigation. Except as set forth on Schedule 6.1.5, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of any Loan
Party, threatened against such Loan Party or any Subsidiary of such Loan Party
at law or in equity before any Official Body as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected to result in a Material Adverse Change. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of any order,
writ, injunction or any decree of any Official Body which could reasonably be
expected to result in any Material Adverse Change.

6.1.6 Financial Statements.

(i) Historical Statements. The Borrower has delivered to the Administrative
Agent copies of its audited consolidated year-end financial statements for and
as of the end of the fiscal years ended December 31, 2010. In addition, the
Borrower has delivered to the Administrative Agent copies of its unaudited
consolidated interim financial statements for the fiscal year to date and as of
the end of the fiscal quarter ended September 30, 2011 (all such annual and
interim statements being collectively referred to as the “Statements”). The
Statements were compiled from the books and records maintained by the Borrower’s
management, are correct and complete and fairly represent the consolidated
financial position of the Borrower and its Subsidiaries as of the respective
dates thereof and the results of operations for the fiscal periods then ended
and have been prepared in accordance with GAAP consistently applied, subject (in
the case of the interim statements) to normal year-end audit adjustments and the
absence of footnotes.

 

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(ii) Accuracy of Financial Statements. Neither the Borrower nor any Subsidiary
of the Borrower has any liabilities, contingent or otherwise, or forward or
long-term commitments that are not disclosed in the Statements or in the notes
thereto, and except as disclosed therein there are no unrealized or anticipated
losses from any commitments of the Borrower or any Subsidiary of the Borrower
which could reasonably be expected to cause a Material Adverse Change. Since
December 31, 2010, no Material Adverse Change has occurred.

6.1.7 Margin Stock. None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U, T or X as promulgated by the Board of Governors of the
Federal Reserve System). No part of the proceeds of any Loan has been or will be
used, immediately, incidentally or ultimately, to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock or which is inconsistent with the provisions of the regulations
of the Board of Governors of the Federal Reserve System. None of the Loan
Parties or any Subsidiary of any Loan Party holds or intends to hold margin
stock in such amounts that more than 25% of the reasonable value of the assets
of any Loan Party or Subsidiary of any Loan Party are or will be represented by
margin stock.

6.1.8 Full Disclosure. Neither this Agreement nor any other Loan Document, nor
any certificate, statement, agreement or other documents furnished to the
Administrative Agent or any Lender in connection herewith or therewith,
contains, when taken as a whole, any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to any Loan Party which
materially adversely affects the business, property, assets, financial
condition, or results of operations of any Loan Party or Subsidiary of any Loan
Party which has not been set forth in this Agreement or in the certificates,
statements, agreements or other documents furnished in writing to the
Administrative Agent and the Lenders prior to or at the date hereof in
connection with the transactions contemplated hereby.

6.1.9 Taxes. All federal, state, local and other tax returns required to have
been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except to the extent that (i) such taxes, fees, assessments and other charges
are being contested in good faith by appropriate proceedings diligently
conducted and for which such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made and (ii) the failure to do so
would not result in a Material Adverse Change.

6.1.10 Patents, Trademarks, Copyrights, Licenses, Etc. Each Loan Party and each
Subsidiary of each Loan Party owns or possesses all the material patents,
trademarks, service marks, trade names, copyrights, licenses, registrations,
franchises, permits and rights necessary to own and operate its properties and
to carry on its business as presently conducted and planned to be conducted by
such Loan Party or Subsidiary, without known possible, alleged or actual
conflict with the rights of others that would result in a Material Adverse
Change.

 

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6.1.11 Liens in the Collateral. The Liens in the Collateral granted to the
Administrative Agent for the benefit of the Lenders pursuant to the Patent,
Trademark and Copyright Security Agreement, the Pledge Agreement and the
Security Agreement (collectively, the “Collateral Documents”) constitute and
will continue to constitute Prior Security Interests in the Collateral (assuming
the due filing of all financing statements and similar documents necessary to
perfect such Liens). All filing fees and other expenses in connection with the
perfection of such Liens have been or will be paid by the Borrower.

6.1.12 Insurance. The properties of each Loan Party and each of its Subsidiaries
are insured pursuant to policies and other bonds which are valid and in full
force and effect and which provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each such Loan Party and Subsidiary in accordance with prudent business
practice in the industry of such Loan Parties and Subsidiaries, except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Change.

6.1.13 ERISA Compliance. (i) Each Plan is set forth on Schedule 6.1.13 hereof,
which schedule shall be delivered to Administrative Agent within thirty
(30) days after the Closing Date. Except as would not result in a Material
Adverse Change, (a) each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state Laws,
(b) each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS, an application for such
a letter is currently being processed by the IRS with respect thereto or is a
prototype or volume submitter plan entitled to rely on the favorable opinion or
advisory letter issued by the IRS to the sponsor of such prototype or volume
submitter plan, and, to the knowledge of Borrower, nothing has occurred which
would prevent, or cause the loss of, such qualification and (c) the Borrower and
each ERISA Affiliate have made all required contributions to each Plan and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

(ii) Except as would not result in a Material Adverse Change, (a) no ERISA Event
has occurred or is reasonably expected by the Borrower or any ERISA Affiliate to
occur; (b) no Pension Plan has an unfunded pension liability (i.e. excess of
benefit liabilities over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan
for the applicable plan year); (c) neither Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, a liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (d) to the knowledge of the Borrower or any ERISA
Affiliate, neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and, to the knowledge of the
Borrower or any ERISA Affiliate, no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; (e) neither
the Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA; and (f) neither Borrower nor any
ERISA Affiliate has breached any responsibilities, obligations or duties imposed
upon it by ERISA with respect to any Plan.

 

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6.1.14 Environmental Matters. Each Loan Party is and, to the knowledge of each
respective Loan Party and each of its Subsidiaries is and has been in compliance
with applicable Environmental Laws except as disclosed on Schedule 6.1.14; and
except where the failure to comply would not reasonably be expected to result in
a Material Adverse Change.

6.1.15 Solvency. Before and after giving effect to the initial Loans hereunder,
each of the Loan Parties is Solvent.

6.2 Updates to Schedules. Should any of the information or disclosures provided
on any of the Schedules attached hereto become outdated or incorrect in any
material respect, the Borrower shall promptly provide the Administrative Agent
in writing with such revisions or updates to such Schedule as may be necessary
or appropriate to update or correct same. No Schedule shall be deemed to have
been amended, modified or superseded by any such correction or update, nor shall
any breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such Schedule be deemed to have been cured thereby, unless
and until the Required Lenders, in their sole and absolute discretion, shall
have accepted in writing such revisions or updates to such Schedule; [provided
however, that the Borrower may update (i) Schedules 6.1.1 and (ii) Schedule
6.1.2 in connection with any transaction permitted under Sections 8.2.6
[Liquidations, Mergers, Consolidations, Acquisitions], 8.2.7 [Dispositions of
Assets or Subsidiaries] and 0 [Subsidiaries, Partnerships and Joint Ventures]
without any Lender approval.

7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

The obligation of each Lender to make Loans and of the Issuing Lender to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions (or waiver thereof in accordance with
Section 11.1):

7.1 First Loans and Letters of Credit.

7.1.1 Deliveries. On the Closing Date, the Administrative Agent shall have
received each of the following in form and substance satisfactory to the
Administrative Agent:

(i) A certificate of each of the Loan Parties signed by an Authorized Officer,
dated the Closing Date stating that (w) all representations and warranties of
the Loan Parties set forth in this Agreement are true and correct in all
material respects, (x) the Loan Parties are in compliance with each of the
covenants and conditions hereunder, (y) no Event of Default or Potential Default
exists, and (z) no Material Adverse Change has occurred since the date of the
last audited financial statements of the Borrower delivered to the
Administrative Agent;

(ii) A certificate dated as of the Closing Date and signed by the Secretary or
an Assistant Secretary of each of the Loan Parties, certifying as appropriate as
to: (a) all action taken by each Loan Party in connection with this Agreement
and the other Loan Documents; (b)

 

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the names of the Authorized Officers authorized to sign the Loan Documents and
their true signatures; and (c) copies of its organizational documents as in
effect on the Closing Date certified by the appropriate state official where
such documents are filed in a state office together with certificates from the
appropriate state officials as to the continued existence and good standing of
each Loan Party in each state where organized or qualified to do business;

(iii) This Agreement and each of the other Loan Documents signed by an
Authorized Officer and all appropriate financing statements and appropriate
stock powers and certificates evidencing the pledged Collateral;

(iv) A written opinion of counsel for the Loan Parties acceptable to
Administrative Agent in its reasonable discretion;

(v) Evidence that adequate insurance, including flood insurance, if applicable,
required to be maintained under this Agreement is in full force and effect, with
additional insured, mortgagee and lender loss payable special endorsements
attached thereto in form and substance satisfactory to the Administrative Agent
and its counsel naming the Administrative Agent as additional insured, mortgagee
and lender loss payee;

(vi) A duly completed Compliance Certificate as of the last day of the fiscal
quarter of Borrower most recently ended prior to the Closing Date, signed by an
Authorized Officer of Borrower;

(vii) All material consents required to effectuate the transactions contemplated
hereby;

(viii) A Lien search in acceptable scope and with acceptable results;

(ix) An executed landlord’s waiver or other lien waiver agreement from the
lessor, warehouse operator or other applicable Person for each leased Collateral
location as required under the Security Agreement; and

(x) Such other documents in connection with such transactions as the
Administrative Agent or said counsel may reasonably request.

7.1.2 Payment of Fees. The Borrower shall have paid all fees payable on or
before the Closing Date as required by this Agreement, the Administrative
Agent’s Letter or any other Loan Document.

7.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing,
extending or increasing any Letters of Credit and after giving effect to the
proposed extensions of credit: (i) the representations and warranties of the
Loan Parties shall then be true and correct in all material respects, except
where such representation or warranty is made as of a specified date, in which
case, as of such specified date, (ii) no Event of Default or Potential Default
shall have occurred and be continuing, (iii) the making of the Loans or
issuance, extension or increase of such Letter of Credit shall not contravene
any Law applicable to any Loan Party or Subsidiary of any Loan Party or any of
the Lenders, and (iv) the Borrower shall have delivered to the Administrative
Agent a duly executed and completed Loan Request or to the Issuing Lender an
application for a Letter of Credit, as the case may be.

 

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8. COVENANTS

The Loan Parties, jointly and severally, covenant and agree that until Payment
In Full, the Loan Parties shall comply at all times with the following
covenants:

8.1 Affirmative Covenants.

8.1.1 Preservation of Existence, Etc. Each Loan Party shall, and shall cause
each of its Subsidiaries to (i) maintain its legal existence as a corporation,
limited partnership or limited liability company and its good standing in its
jurisdiction of formation or incorporation, and (ii) maintain its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary, except where the failure to do so would not result in a
Material Adverse Change and as otherwise expressly permitted in Section 8.2.6
[Liquidations, Mergers, Etc.].

8.1.2 Payment of Liabilities, Including Taxes, Etc. Each Loan Party shall, and
shall cause each of its Subsidiaries to, duly pay and discharge all liabilities
to which it is subject or which are asserted against it, promptly as and when
the same shall become due and payable, including all taxes, assessments and
governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that (i) such liabilities, including taxes, assessments or charges, are
being contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate provisions,
if any, as shall be required by GAAP shall have been made and (ii) the failure
to do so would not result in a Material Adverse Change.

8.1.3 Maintenance of Insurance. Each Loan Party shall, and shall cause each of
its Subsidiaries to, insure its properties and assets against loss or damage by
fire and such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, workers’ compensation,
public liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary, all as reasonably determined by the
Administrative Agent. The Loan Parties shall comply with the covenants and
provide the endorsement set forth on Schedule 8.1.3 relating to property and
related insurance policies covering the Collateral.

8.1.4 Maintenance of Properties and Leases. Each Loan Party shall, and shall
cause each of its Subsidiaries to, maintain in good repair, working order and
condition (ordinary wear and tear excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, such Loan
Party will make or cause to be made all appropriate repairs, renewals or
replacements thereof.

8.1.5 Visitation Rights. Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the

 

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Administrative Agent to visit and inspect any of its properties and to examine
and make excerpts from its books and records and discuss its business affairs,
finances and accounts with its officers, all in such detail and at such times
and as often as any of the Lenders may reasonably request, as long as, absent
the occurrence and during the continuance of an Event of Default, such
inspections and examinations do not cause an undue disruption of the business of
the Loan Parties and their Subsidiaries, provided that so long as no Default or
Event of Default has occurred and is continuing, the Administrative Agent shall
provide the Borrower and the Administrative Agent with reasonable notice prior
to any visit or inspection.

8.1.6 Keeping of Records and Books of Account. The Borrower shall, and shall
cause each Subsidiary of the Borrower to, maintain and keep proper books of
record and account which enable the Borrower and its Subsidiaries to issue
financial statements in accordance with GAAP and as otherwise required by
applicable Laws of any Official Body having jurisdiction over the Borrower or
any Subsidiary of the Borrower, and in which full, true and correct entries
shall be made in all material respects of all its dealings and business and
financial affairs.

8.1.7 Compliance with Laws; Use of Proceeds. Each Loan Party shall, and shall
cause each of its Subsidiaries to, comply with all applicable Laws, including
all Environmental Laws, except where failure to do so would not result in a
Material Adverse Change. The Loan Parties will use the Letters of Credit and the
proceeds of the Loans only in accordance with Section 2.7 [Use of Proceeds] and
as permitted by applicable Law.

8.1.8 Further Assurances. Each Loan Party shall, from time to time, at its
expense, faithfully preserve and protect the Administrative Agent’s Lien on and
Prior Security Interest in the Collateral and all other real and personal
property of the Loan Parties whether now owned or hereafter acquired as a
continuing first priority perfected Lien, subject only to Permitted Liens, and
shall do such other acts and things as the Administrative Agent in its sole
discretion may deem reasonably necessary or advisable from time to time in order
to preserve, perfect and protect the Liens granted under the Loan Documents and
to exercise and enforce its rights and remedies thereunder with respect to the
Collateral.

8.1.9 Anti-Terrorism Laws. None of the Loan Parties is or shall be (i) a Person
with whom any Lender is restricted from doing business under Executive Order
No. 13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved
in making or receiving any contribution of funds, goods or services to or for
the benefit of such a Person or in any transaction that evades or avoids, or has
the purpose of evading or avoiding, the prohibitions set forth in any
Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law.
The Loan Parties shall provide to the Lenders any certifications or information
that a Lender requests to confirm compliance by the Loan Parties with
Anti-Terrorism Laws.

 

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8.2 Negative Covenants.

8.2.1 Indebtedness. Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:

(i) Indebtedness under the Loan Documents;

(ii) Indebtedness incurred with respect to Purchase Money Security Interests and
Capitalized Leases as and to the extent permitted under Section 8.2.13 [Capital
Expenditures and Leases];

(iii) Indebtedness of a Loan Party to another Loan Party which is subordinated
pursuant to the Intercompany Subordination Agreement;

(iv) Indebtedness owing to Foreign Subsidiaries to the extent that such
Indebtedness is subordinated to the Obligations pursuant to the Intercompany
Subordination Agreement and such Indebtedness does not exceed (a) $30,600,000
outstanding for the period commencing the Closing Date through and including
March 31, 2012, and (b) $25,000,000 outstanding at any time thereafter;

(v) Any (i) Lender Provided Hedge, (ii) Other Hedging Transaction approved by
the Administrative Agent and (iii) Indebtedness under any Other Lender Provided
Financial Services Product; provided however, the Loan Parties and their
Subsidiaries shall enter into a Lender Provided Hedge or Other Hedging
Transaction only for hedging (rather than speculative) purposes;

(vi) Guaranties of Indebtedness of Foreign Subsidiaries as permitted by
Section 8.2.4(iii) and (iv) [Guaranties];

(vii) Indebtedness existing on the date hereof and set forth on Schedule 8.2.1
and Permitted Refinancings thereof;

(viii) Indebtedness of any Loan Party or any of its Subsidiaries as an account
party in respect of trade letters of credit;

(ix) Endorsements of items for deposit or collection of commercial paper
received in the ordinary course of business;

(x) Indebtedness issued in the ordinary course of business solely to support any
insurance or self-insurance obligations (including to secure workers’
compensation and other similar insurance coverages);

(xi) Indebtedness in respect of netting services, cash management, overdraft
protections and otherwise in connection with deposit accounts;

(xii) Unsecured Indebtedness to evidence the purchase price of capital stock,
options or warrants of any Loan Party purchased from current or former officers,
directors and employees of such Loan Party;

(xiii) Indebtedness consisting of reimbursement obligations under surety,
indemnity, performance, release and appeal bonds and guarantees thereof and
letters of credit required in the ordinary course of business or in connection
with the enforcement of rights or claims of the Loan Parties and their
Subsidiaries, in each case to the extent a Letter of Credit supports in whole or
in part the obligations of the Loan Parties or any of their Subsidiaries with
respect to such bonds, guarantees or letters of credit;

 

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(xiv) Obligations for payment of rent under operating leases if and to the
extent such leases are or would be classified as operating leases under
Financial Accounting Standards Board Accounting Standards Codification 840 as in
effect as of the date of this Agreement but are required to be reclassified as
capital leases as a result of amendments to Financial Accounting Standards Board
Account Standards Codification 840 made in accordance with those account
standards proposed in the Proposed Accounting Standards Update exposure draft
issued on August 17, 2010;

(xv) Unsecured Indebtedness in an amount not exceeding $1,000,000 outstanding at
any time in addition to any other amounts permitted under this Section 8.2.1;

(xvi) Indebtedness of Foreign Subsidiaries from third party lenders and
guaranties thereof permitted under Section 8.2.3(iii) [Guaranties] in an amount
not to exceed $25,000,000 outstanding at any time;

(xvii) Guarantees of third party loans to franchisees of retail stores not to
exceed $3,000,000 in the aggregate outstanding at any time;

(xviii) Indebtedness of Foreign Subsidiaries owing to another Foreign
Subsidiary; and

(xix) Unsecured guaranties of Indebtedness of the Borrowers permitted by
Section 8.2.3(i) [Guaranties].

8.2.2 Liens; Lien Covenants. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.

8.2.3 Guaranties. Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time, directly or indirectly, become or be liable
in respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
(i) unsecured guaranties of Indebtedness of the Borrowers permitted hereunder,
(ii) the endorsement of checks in the ordinary course of business,
(iii) guaranties by Crocs or any Foreign Subsidiary of Indebtedness of Foreign
Subsidiaries not to exceed $25,000,000 in the aggregate outstanding at any time
(excluding guaranties of Lender Provided Hedges), (iv) guaranties by Crocs of
obligations of Foreign Subsidiaries under Lender Provided Hedges; (v) guaranties
by Crocs of contractual obligations of Foreign Subsidiaries that do not
constitute Indebtedness and (vi) guaranties of third-party loans to franchisees
of retail stores, which together with any loans or advances permitted under
Section 8.2.4(vi) [Loans and Investments) hereof, shall not exceed $3,000,000 in
the aggregate outstanding at any time.

8.2.4 Loans and Investments. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or

 

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advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) or limited
liability company interest in, or any other investment or interest in, or make
any capital contribution to, any other Person, or agree, become or remain liable
to do any of the foregoing, except:

(i) trade credit extended on usual and customary terms in the ordinary course of
business;

(ii) as disclosed on Schedule 8.2.4 hereof;

(iii) advances to employees to meet expenses incurred by such employees in the
ordinary course of business;

(iv) investments in and loans and advances to Foreign Subsidiaries to the extent
that (A) such intercompany loans do not exceed $25,000,000 in the aggregate
outstanding at any time, (b) no Potential Default or Event of Default has
occurred or would occur after giving pro forma effect to such intercompany
loans, and (c) Availability is greater than or equal to $35,000,000 after giving
pro forma effect to such intercompany loans;

(v)(a) Permitted Investments and (b) Permitted Foreign Investments by Foreign
Subsidiaries;

(vi) loans, advances and other investments in franchisees of retail stores,
which together with any guaranties permitted under Section 8.2.3(vi)
[Guaranties)] hereof, shall not exceed $3,000,000 in the aggregate outstanding
at any time;

(vii) loans, advances and other investments in other Loan Parties; and

(viii) loans, advances and other investments between or among Foreign
Subsidiaries.

8.2.5 Dividends and Related Distributions. Each of the Loan Parties shall not,
and shall not permit any of its Subsidiaries to, make or pay, or agree to become
or remain liable to make or pay, any dividend or other distribution of any
nature (whether in cash, property, securities or otherwise) on account of or in
respect of its shares of capital stock, partnership interests or limited
liability company interests on account of the purchase, redemption, retirement
or acquisition of its shares of capital stock (or warrants, options or rights
therefor), partnership interests or limited liability company interests, except
(i) dividends or other distributions payable (A) from any Loan Party to another
Loan Party, (B) from any Foreign Subsidiary to any Loan Party or any of its
Subsidiaries and (C) from any Subsidiary of a Loan Party to any Loan Party,
(ii) any purchase, redemption or retirement in connection with a transaction
permitted by Section 8.2.6 [Liquidations, Mergers, Consolidations,
Acquisitions], and (iii) any purchase, redemption or retirement of equity
interests of any Borrower so long as (A) the amount of such purchases,
redemptions or retirements does not exceed $25,000,000 in the aggregate in any
fiscal year, and (B) at the time of and after giving Pro Forma effect to such
purchase, redemption or retirement, (I) no Potential Default or Event of Default
has occurred and is continuing or would occur and (II) Availability is greater
than or equal to $70,000,000.

 

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8.2.6 Liquidations, Mergers, Consolidations, Acquisitions. Each of the Loan
Parties shall not, and shall not permit any of its Subsidiaries to, dissolve,
liquidate or wind-up its affairs, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any other Person except (i) any Borrower
may merge or consolidate with or into another Borrower, (ii) any Borrower may
acquire all of the assets or equity interests of another Borrower,
(iii) Permitted Acquisitions, and (iv) repurchases of franchisee-owned retail
stores for cash consideration not to exceed, together with outstanding loans,
advances and other investments in such franchisees permitted under
Section 8.2.4(vi) [Loans and Investments] and guarantees permitted under
Section 8.2.3(v) [Guaranties], $3,000,000 in the aggregate.

8.2.7 Dispositions of Assets or Subsidiaries. Each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, sell, convey, assign,
lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including sale, assignment, discount or other disposition of accounts, contract
rights, chattel paper, equipment or general intangibles with or without recourse
or of capital stock, shares of beneficial interest, partnership interests or
limited liability company interests of a Subsidiary of such Loan Party), except:

(i) transactions involving the sale of inventory in the ordinary course of
business;

(ii) the licensing of the Borrower’s intellectual property in the ordinary
course of business;

(iii) the donation of inventory to charity during any fiscal year in an
aggregate not to exceed $2,000,000 in any fiscal year;

(iv) the disposition or transfer of obsolete and worn-out equipment in the
ordinary course of business during any fiscal year having an aggregate fair
market value of not more than $1,000,000 and only to the extent that (i) the
proceeds of any such disposition are used to acquire replacement equipment which
is subject to Administrative Agent’s Prior Security Interest or (ii) the
proceeds of which are applied as a mandatory prepayment of the Loans in
accordance with the provisions of Section 5.7.1 [Sale of Assets] above;

(v) sales or dispositions of assets or Subsidiaries not to exceed $10,000,000 in
any fiscal year and only so long as the net proceeds of such sales or
disposition are applied as a mandatory prepayment of the Loans in accordance
with the provisions of Section 5.7.1 [Sale of Assets] above;

(vi) any sale, transfer or lease of assets by any Loan Party or any of its
Subsidiaries to another Loan Party; or

(vii) any sale, transfer or lease of assets, other than those specifically
excepted pursuant to clauses (i) through (v) above, which is approved by the
Required Lenders so long as the after-tax proceeds (as reasonably estimated by
the Borrower) are applied as a mandatory prepayment of the Loans in accordance
with the provisions of Section 5.7.1 [Sale of Assets] above.

 

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8.2.8 Affiliate Transactions. Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, purchase, acquire or
lease any property from, or sell, transfer or lease any property to, or
otherwise enter into any transaction or deal with, any Affiliate, except (w) as
permitted by Sections 8.2.1 [Indebtedness], 8.2.4 [Loans and Investments], 8.2.5
[Dividends and Related Distributions], 8.2.6 [Liquidations, Mergers,
Consolidations, Acquisitions] and 8.2.7 [Dispositions of Assets and
Subsidiaries], (x) transactions between or among a Loan Party or any of its
Subsidiaries and another Loan Party or any of its Subsidiaries, (y) employment,
equity compensation and related agreements among Loan Parties and any officers,
directors and employees of Loan Parties and payment of fees to and reimbursement
of expenses of members of the Board of Directors in the ordinary course of
business of the Loan Parties, and (z) transactions disclosed to the
Administrative Agent, which are in the ordinary course of business, on an
arm’s-length basis on terms and conditions no less favorable than terms and
conditions which would have been obtainable from a Person other than an
Affiliate.

8.2.9 Subsidiaries, Partnerships and Joint Ventures. Each of the Loan Parties
shall not, and shall not permit any of its Subsidiaries to own or create
directly or indirectly any Subsidiaries other than (i) any Subsidiary existing
as of the Closing Date, and (ii) any Subsidiary formed after the Closing Date
(A) the outstanding equity interests (except with respect to a Foreign
Subsidiary, no more than 65% of its outstanding equity interests shall be
required to be pledged as collateral) of which are pledged as collateral under
the Security Agreement to secure the Obligations, and (B) which becomes a
Guarantor by delivering to the Administrative Agent (I) a signed Guaranty and
Suretyship Agreement in form and substance satisfactory to Administrative Agent
in its Permitted Discretion; (II) documents in the forms described in
Section 7.1 [First Loans and Letters of Credit] modified as appropriate; and
(III) documents necessary to grant and perfect Prior Security Interests to the
Administrative Agent for the benefit of the Lenders in the equity interests of,
and Collateral held by, such Subsidiary; provided, however, that Foreign
Subsidiaries shall not be required to become Guarantors. No Loan Party shall
become or agree to become a party to a Joint Venture.

8.2.10 Continuation of or Change in Business. Each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, engage in any business
other than other than designing, manufacturing, distributing and marketing
footwear for men, women and children, apparel, accessories, bags and backpacks,
and other products utilizing Croslite, and activities necessary to conduct the
foregoing, substantially as conducted and operated by such Loan Party or
Subsidiary during the present fiscal year, and such Loan Party or Subsidiary
shall not permit any material change in such business.

8.2.11 Fiscal Year. The Borrower shall not, and shall not permit any Subsidiary
of the Borrower to, change its fiscal year from the twelve-month period
beginning January 1 and ending December 31.

8.2.12 Changes in Organizational Documents. Each of the Loan Parties shall not,
and shall not permit any of its Subsidiaries to, amend in any respect its
certificate of incorporation (including any provisions or resolutions relating
to capital stock), by-laws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents without providing at least twenty (20)

 

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calendar days’ prior written notice to the Administrative Agent and the Lenders
and, in the event such change would be adverse to the Lenders as determined by
the Administrative Agent in its sole discretion, obtaining the prior written
consent of the Required Lenders.

8.2.13 Capital Expenditures and Leases. Each of the Loan Parties shall not, and
shall not permit any of their Subsidiaries to, contract for, purchase or make
any expenditure or commitments for Capital Expenditures in an aggregate amount
for all Loan Parties in excess of $60,000,000 per fiscal year (excluding Capital
Expenditures made in connection with the implementation and licensing of a new
accounting system in an amount up to $60,000,000 amortized over a five (5) year
period).

8.2.14 Minimum Fixed Charge Coverage Ratio. The Loan Parties shall not permit
the Fixed Charge Coverage Ratio, calculated as of the end of each fiscal quarter
for the four (4) fiscal quarters then ended, to be less than 1.25 to 1.0.

8.2.15 Maximum Leverage Ratio. The Loan Parties shall not at any time permit the
Leverage Ratio to be greater than 3.00 to 1.00.

8.3 Reporting Requirements. The Loan Parties will furnish or cause to be
furnished to the Administrative Agent and each of the Lenders:

8.3.1 Quarterly Financial Statements. Within forty five (45) days after the end
of each fiscal quarter (other than the fiscal quarter ending December 31 for
which Borrower shall have sixty (60) days after such fiscal quarter end), an
unaudited balance sheet of Borrowers on a consolidated and consolidating basis
and unaudited statements of income and stockholders’ equity and cash flow of
Borrowers on a consolidated and consolidating basis reflecting results of
operations from the beginning of the fiscal year to the end of such quarter and
for such quarter, prepared on a basis consistent with prior practices and
complete and correct in all material respects, subject to normal and recurring
year end adjustments and the absence of footnotes that individually and in the
aggregate are not material to Borrowers’ business; provided however that if
Crocs files its quarterly report on Form 10-Q for the applicable fiscal quarter
and such quarterly report contains the financial statements and reports
described above, in a format acceptable to Administrative Agent in its Permitted
Discretion, then Borrowers may satisfy the requirements of this Section 8.3.1 by
delivering a copy of such quarterly report to the Administrative Agent and each
Lender. The reports shall be accompanied by a Compliance Certificate and a Net
Mark to Market Exposure statement for each Lender (other than Administrative
Agent).

8.3.2 Annual Financial Statements. Within ninety (90) days after the end of each
fiscal year of Borrowers, financial statements of Borrowers on a consolidating
and consolidated basis including, but not limited to, statements of income and
stockholders’ equity and cash flow from the beginning of the current fiscal year
to the end of such fiscal year and the balance sheet as at the end of such
fiscal year, all prepared in accordance with GAAP applied on a basis consistent
with prior practices, and in reasonable detail and reported upon without
qualification by an independent certified public accounting firm selected by
Borrowers and satisfactory to Administrative Agent(the “Accountants”); provided
however that if Crocs files its annual report on Form 10-K for the applicable
fiscal year and such annual report contains the

 

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financial statements and reports described above, in a format acceptable to
Administrative Agent in its Permitted Discretion, then Borrowers may satisfy the
requirements of this Section 8.3.2 by delivering a copy of such annual report to
the Administrative Agent and each Lender. The report of the Accountants shall be
accompanied by a statement of the Accountants certifying that (i) they have
caused this Agreement to be reviewed, (ii) in making the examination upon which
such report was based either no information came to their attention which to
their knowledge constituted an Event of Default or a Potential Default under
this Agreement or any related agreement or, if such information came to their
attention, specifying any such Potential Default or Event of Default, its
nature, when it occurred and whether it is continuing, and such report shall
contain or have appended thereto calculations which set forth Borrowers’
compliance with the requirements or restrictions imposed by Sections 8.2.1
[Indebtedness], 8.2.4 [Loans and Investments], 8.2.5 [Dividends and Related
Distributions], 8.2.14 [Capital Expenditures and Leases], 8.2.15 [Minimum Fixed
Charge Coverage Ratio] and 8.2.16 [Maximum Leverage Ratio] hereof. In addition,
the reports shall be accompanied by a Compliance Certificate.

8.3.3 Certificate of the Borrower. Concurrently with the financial statements of
the Borrower furnished to the Administrative Agent and to the Lenders pursuant
to Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual Financial
Statements], a certificate (each a “Compliance Certificate”) of the Borrower
signed by the Chief Executive Officer, President or Chief Financial Officer of
the Borrower, in the form of Exhibit 8.3.3.

8.3.4 Notices. The Borrower shall furnish or cause to be furnished written
notice to the Administrative Agent and each of the Lenders:

8.3.4.1 Default. Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
an Authorized Officer setting forth the details of such Event of Default or
Potential Default and the action which such Loan Party proposes to take with
respect thereto.

8.3.4.2 Litigation. Promptly after the commencement thereof, notice of all
actions, suits, proceedings or investigations before or by any Official Body or
any other Person against any Loan Party or Subsidiary of any Loan Party which if
adversely determined would constitute a Material Adverse Change.

8.3.4.3 Organizational Documents. Within the time limits set forth in
Section 8.2.12 [Changes in Organizational Documents], any amendment to the
organizational documents of any Loan Party.

8.3.4.4 Erroneous Financial Information. Promptly in the event that the Borrower
or the Accountants conclude or advise that any previously issued financial
statement, audit report or interim review should no longer be relied upon or
that disclosure should be made or action should be taken to prevent future
reliance.

8.3.4.5 ERISA Event. Promptly after (i) Borrower or any ERISA Affiliate knows or
has reason to know of the occurrence of any ERISA Event together with a written
statement describing such ERISA Event and the action, if any, which Borrower or
any ERISA Affiliate has taken, is taking, or proposes to take with respect
thereto and, when known,

 

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any action taken or threatened by the IRS, Department of Labor or PBGC with
respect thereto, (ii) Borrower or any ERISA Affiliate knows or has reason to
know that a non-exempt prohibited transaction (as defined in Section 406 of
ERISA or 4975 of the Code) has occurred with respect to any Pension Plan,
(iii) a funding waiver request has been filed with respect to any Pension Plan
together with all communications received by Borrower or any ERISA Affiliate
with respect to such request, (iv) any material increase in the benefits of any
existing Pension Plan or the establishment of any new Pension Plan or the
commencement of contributions to any Plan to which Borrower or any ERISA
Affiliate was not previously contributing shall occur, (v) Borrower or any ERISA
Affiliate shall receive any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of a Pension Plan under
Section 401(a) of the Code, together with copies of each such letter,
(vi) Borrower or any ERISA Affiliate shall fail to make a required installment
or any other required payment under the Code or ERISA with respect to a Pension
Plan or Multiemployer Plan on or before the due date for such installment or
payment, or (vii) Borrower or any ERISA Affiliate knows that a Multiemployer
Plan is subject to Section 432 of the Code or Section 305 of ERISA; if
individually or together with other events described above would result in a
Material Adverse Change.

8.3.4.6 Other Reports. Promptly upon their becoming available to the Borrower:

(i) Annual Budget. The annual budget and any forecasts or projections of the
Borrower, to be supplied not later than thirty (30) days after the commencement
of the fiscal year to which any of the foregoing may be applicable,

(ii) Management Letters. Any reports including management letters submitted to
the Borrower by independent accountants in connection with any annual, interim
or special audit,

(iii) SEC Reports; Shareholder Communications. Reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses and other shareholder
communications, filed by the Borrower with the Securities and Exchange
Commission; provided that the documents required to be delivered pursuant to
this Section 8.3.4.6(iii) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date on which such documents are
filed for public availability on the Securities and Exchange Commission’s
Electronic Data Gathering and Retrieval System.

(iv) Other Information. Such other reports and information as any of the Lenders
may from time to time reasonably request.

9. DEFAULT

9.1 Events of Default. An Event of Default shall mean the occurrence or
existence of any one or more of the following events or conditions (whatever the
reason therefor and whether voluntary, involuntary or effected by operation of
Law):

9.1.1 Payments Under Loan Documents. The Borrower shall fail to pay when due any
principal of any Loan (including scheduled installments, mandatory prepayments
or the payment due at maturity), Reimbursement Obligation or Letter of Credit or
Obligation or any

 

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interest on any Loan, Reimbursement Obligation or Letter of Credit Obligation or
any other amount owing hereunder or under the other Loan Documents on the date
on which such principal, interest or other amount becomes due in accordance with
the terms hereof or thereof;

9.1.2 Breach of Warranty. Any representation or warranty made at any time by any
of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished;

9.1.3 Breach of Negative Covenants or Visitation Rights. Any of the Loan Parties
shall default in the observance or performance of any covenant contained in
Section 8.1.5 [Visitation Rights] or Section 8.2 [Negative Covenants];

9.1.4 Breach of Other Covenants. Any of the Loan Parties shall default in the
observance or performance of any other covenant, condition or provision hereof
or of any other Loan Document and such default shall continue unremedied for a
period of the earlier of ten (10) Business Days from notice from Agent or
knowledge of Borrower;

9.1.5 Defaults in Other Agreements. A default in respect to any other obligation
of the Borrower under any other agreement to which it is a party (other than the
Loan Documents) which causes a Material Adverse Change and which such default is
not cured within any applicable grace period;

9.1.6 Final Judgments or Orders. Any judgment or judgments are rendered against
any Borrower in an aggregate amount in excess of $1,000,000 or against all
Borrowers in an aggregate amount in excess of $2,000,000 and (i) enforcement
proceedings shall have been commenced by a creditor upon such judgment,
(ii) there shall be any period of thirty (30) consecutive days during which the
same shall remain undischarged and a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, shall not be in effect, or (iii) any
such judgment results in the creation of a Lien upon any of the Collateral
(other than a Permitted Encumbrance);

9.1.7 Loan Document Unenforceable. Any of the Loan Documents shall cease to be
legal, valid and binding agreements enforceable against the party executing the
same or such party’s successors and assigns (as permitted under the Loan
Documents) in accordance with the respective terms thereof or shall in any way
be terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested or
cease to give or provide the respective Liens, security interests, rights,
titles, interests, remedies, powers or privileges intended to be created
thereby;

9.1.8 Uninsured Losses; Proceedings Against Assets. There shall occur any
material uninsured damage to or loss, theft or destruction of any of the
Collateral in excess of $1,000,000 or the Collateral or any other of the Loan
Parties’ or any of their Subsidiaries’ assets are attached, seized, levied upon
or subjected to a writ or distress warrant; or such come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors and
the same is not cured within thirty (30) days thereafter;

 

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9.1.9 Events Relating to Plans. An event or condition specified in
Section 8.3.4.5 shall occur with respect to any Plan and, as a result of such
event or condition, together with all other such events or conditions, Borrower
or any ERISA Affiliate shall incur a liability to a Plan or the PBGC (or both)
which would result in a Material Adverse Change;

9.1.10 Change of Control. Any Change of Control shall occur.

9.1.11 Relief Proceedings. (i) A Relief Proceeding shall have been instituted
against any Loan Party or Subsidiary of a Loan Party and such Relief Proceeding
shall remain undismissed or unstayed and in effect for a period of thirty
(30) consecutive days or such court shall enter a decree or order granting any
of the relief sought in such Relief Proceeding, (ii) any Loan Party or
Subsidiary of a Loan Party institutes, or takes any action in furtherance of, a
Relief Proceeding, or (iii) any Loan Party or any Subsidiary of a Loan Party
ceases to be Solvent or admits in writing its inability to pay its debts as they
mature.

9.2 Consequences of Event of Default.

9.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings. If an Event of Default specified under Sections 9.1.1 through
9.1.10 shall occur and be continuing, the Lenders and the Administrative Agent
shall be under no further obligation to make Loans and the Issuing Lender shall
be under no obligation to issue Letters of Credit and the Administrative Agent
may, and upon the request of the Required Lenders, shall (i) by written notice
to the Borrower, declare the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Lenders hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Administrative Agent for the benefit of each
Lender without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived, and (ii) require the Borrower to, and the
Borrower shall thereupon, deposit in a non-interest-bearing account with the
Administrative Agent, as cash collateral for its Obligations under the Loan
Documents, an amount equal to the maximum amount currently or at any time
thereafter available to be drawn on all outstanding Letters of Credit, and the
Borrower hereby pledges to the Administrative Agent and the Lenders, and grants
to the Administrative Agent and the Lenders a security interest in, all such
cash as security for such Obligations; and

9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of
Default specified under Section 9.1.11 [Relief Proceedings] shall occur, the
Lenders shall be under no further obligations to make Loans hereunder and the
Issuing Lender shall be under no obligation to issue Letters of Credit and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower to the
Lenders hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and

9.2.3 Set-off. If an Event of Default shall have occurred and be continuing,
each Lender, the Issuing Lender, and each of their respective Affiliates and any
participant of such Lender or Affiliate which has agreed in writing to be bound
by the provisions of Section 5.3 [Sharing of Payments by Lenders] is hereby
authorized at any time and from time to time, to the

 

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fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the Issuing Lender or any such Affiliate or
participant to or for the credit or the account of any Loan Party against any
and all of the Obligations of such Loan Party now or hereafter existing under
this Agreement or any other Loan Document to such Lender, the Issuing Lender,
Affiliate or participant, irrespective of whether or not such Lender, Issuing
Lender, Affiliate or participant shall have made any demand under this Agreement
or any other Loan Document and although such Obligations of the Borrower or such
Loan Party may be contingent or unmatured or are owed to a branch or office of
such Lender or the Issuing Lender different from the branch or office holding
such deposit or obligated on such Indebtedness. The rights of each Lender, the
Issuing Lender and their respective Affiliates and participants under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, the Issuing Lender or their respective Affiliates and
participants may have. Each Lender and the Issuing Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application; and

9.2.4 Application of Proceeds. From and after the date on which the
Administrative Agent has taken any action pursuant to this Section 9.2 and until
all Obligations of the Loan Parties have been paid in full, any and all proceeds
received by the Administrative Agent from any sale or other disposition of the
Collateral, or any part thereof, or the exercise of any other remedy by the
Administrative Agent, shall be applied as follows:

(i) first, to reimburse the Administrative Agent and the Lenders for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys’
and paralegals’ fees and legal expenses, incurred by the Administrative Agent or
the Lenders in connection with realizing on the Collateral or collection of any
Obligations of any of the Loan Parties under any of the Loan Documents,
including advances made by the Lenders or any one of them or the Administrative
Agent for the reasonable maintenance, preservation, protection or enforcement
of, or realization upon, the Collateral, including advances for taxes,
insurance, repairs and the like and reasonable expenses incurred to sell or
otherwise realize on, or prepare for sale or other realization on, any of the
Collateral;

(ii) second, to the repayment of all Obligations then due and unpaid of the Loan
Parties to the Lenders or their Affiliates incurred under this Agreement or the
Loan Documents (other than under any Lender Provided Hedge or Other Lender
Provided Financial Services Product), whether of principal, interest, fees,
expenses or otherwise and to cash collateralize the Letter of Credit
Obligations;

(iii) third, to the repayment of all Obligations then due and unpaid of the Loan
Parties to the Lenders or their Affiliates incurred under any Lender Provided
Hedge or Other Lender Provided Financial Services Product; and

(iv) fourth, the balance, if any, as required by Law.

 

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10. THE ADMINISTRATIVE AGENT

10.1 Appointment and Authority. Each of the Lenders and the Issuing Lender
hereby irrevocably appoints PNC to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The
provisions of this Section 10 are solely for the benefit of the Administrative
Agent, the Lenders and the Issuing Lender, and neither the Borrower nor any
other Loan Party shall have rights as a third party beneficiary of any of such
provisions.

10.2 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

10.3 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Potential Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents); provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.2 [Modifications, Amendments or
Waivers] and 9.2 [Consequences of Event of Default]) or (ii) in

 

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the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Potential
Default or Event of Default unless and until notice describing such Potential
Default or Event of Default is given to the Administrative Agent by the
Borrower, a Lender or the Issuing Lender.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Potential Default or Event of
Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Section 7
[Conditions of Lending and Issuance of Letters of Credit] or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

10.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Lender prior to the
making of such Loan or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

10.5 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Section 10 shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

10.6 Resignation of Administrative Agent. Subject to the appointment and
acceptance of a successor Administrative Agent as provided in this Section 10.6,
the Administrative Agent may at any time give notice of its resignation to the
Lenders, the Issuing Lender and the

 

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Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, with approval from the Borrower (so long as no Event of
Default has occurred and is continuing), to appoint a successor, such approval
not to be unreasonably withheld or delayed. If no such successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Issuing Lender, appoint a successor Administrative Agent;
provided that if the Administrative Agent shall notify the Borrower and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (i) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders or the Issuing Lender under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (ii) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the Issuing
Lender directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section 10.6. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Section 10 and
Section 11.4 [Expenses; Indemnity; Damage Waiver] shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

If PNC resigns as Administrative Agent under this Section 10.6, PNC shall also
resign as an Issuing Lender. Upon the appointment of a successor Administrative
Agent hereunder, such successor shall (i) succeed to all of the rights, powers,
privileges and duties of PNC as the retiring Issuing Lender and Administrative
Agent and PNC shall be discharged from all of its respective duties and
obligations as Issuing Lender and Administrative Agent under the Loan Documents,
and (ii) issue letters of credit in substitution for the Letters of Credit
issued by PNC, if any, outstanding at the time of such succession or make other
arrangement satisfactory to PNC to effectively assume the obligations of PNC
with respect to such Letters of Credit.

10.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
Issuing Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the Issuing Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall

 

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from time to time deem appropriate, continue to make its own decisions in taking
or not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.

10.8 No Other Duties, etc. Anything herein to the contrary notwithstanding, none
of the Lenders listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Administrative Agent, a Lender or the
Issuing Lender hereunder.

10.9 Administrative Agent’s Fee. The Borrower shall pay to the Administrative
Agent a nonrefundable fee (the “Administrative Agent’s Fee”) under the terms of
a letter (the “Administrative Agent’s Letter”) between the Borrower and
Administrative Agent, as amended from time to time.

10.10 Authorization to Release Collateral and Guarantors. The Lenders and
Issuing Lenders authorize the Administrative Agent to release (i) any Collateral
consisting of assets or equity interests sold or otherwise disposed of in a sale
or other disposition or transfer permitted under Section 8.2.7 [Disposition of
Assets or Subsidiaries] or 8.2.6 [Liquidations, Mergers, Consolidations,
Acquisitions], and (ii) any Guarantor from its obligations under the Guaranty
Agreement if the ownership interests in such Guarantor are sold or otherwise
disposed of or transferred to persons other than Loan Parties or Subsidiaries of
the Loan Parties in a transaction permitted under Section 8.2.7 [Disposition of
Assets or Subsidiaries] or 8.2.6 [Liquidations, Mergers, Consolidations,
Acquisitions]. Upon the occurrence of the events set forth in clauses (i) and
(ii) above, and upon request by the Borrower to the Administrative Agent, the
Administrative Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the
Collateral and the Liens on such Collateral granted to the Administrative Agent
for the benefit of the Lenders.

10.11 No Reliance on Administrative Agent’s Customer Identification Program.
Each Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on the Administrative Agent to
carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer
identification program, or other obligations required or imposed under or
pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with any of
the Loan Parties, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) comparisons with government lists,
(iv) customer notices or (v) other procedures required under the CIP Regulations
or such other Laws.

11. MISCELLANEOUS

11.1 Joint and Several Obligations.

11.1.1 The handling of this credit facility as a co-borrowing facility in the
manner set forth in this Agreement is solely as an accommodation to Borrowers
and at their

 

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request. Neither Administrative Agent nor any Lender shall incur liability to
Borrowers as a result thereof. To induce Administrative Agent and Lenders to do
so and in consideration thereof, each Borrower hereby indemnifies Administrative
Agent and each Lender and holds Administrative Agent and each Lender harmless
from and against any and all liabilities, expenses, losses, damages and claims
of damage or injury asserted against Administrative Agent or any Lender by any
Person arising from or incurred by reason of the handling of the financing
arrangements of Borrowers as provided herein, reliance by Administrative Agent
or any Lender on any request or instruction from any Borrower or any other
action taken by Administrative Agent or any Lender with respect to this
Section 11.1 except due to willful misconduct or gross (not mere) negligence by
the indemnified party (as determined by a court of competent jurisdiction in a
final and non-appealable judgment).

11.1.2 All Obligations shall be joint and several, and each Borrower shall make
payment upon the maturity of the Obligations by acceleration or otherwise, and
such obligation and liability on the part of each Borrower shall in no way be
affected by any extensions, renewals and forbearance granted by Administrative
Agent or any Lender to any Borrower, failure of Administrative Agent or any
Lender to give any Borrower notice of borrowing or any other notice, any failure
of Administrative Agent or any Lender to pursue or preserve its rights against
any Borrower, the release by Administrative Agent or any Lender of any
Collateral now or thereafter acquired from any Borrower, and such agreement by
each Borrower to pay upon any notice issued pursuant thereto is unconditional
and unaffected by prior recourse by Administrative Agent or any Lender to the
other Borrowers or any Collateral for such Borrower’s Obligations or the lack
thereof. Each Borrower waives all suretyship defenses.

11.1.3 Each Borrower expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution of any other claim which
such Borrower may now or hereafter have against the other Borrowers or other
Person directly or contingently liable for the Obligations hereunder, or against
or with respect to the other Borrowers’ property (including, without limitation,
any property which is Collateral for the Obligations), arising from the
existence or performance of this Agreement, until termination of this Agreement
and Payment in Full of the Obligations.

11.2 Modifications, Amendments or Waivers. With the written consent of the
Required Lenders, the Administrative Agent, acting on behalf of all the Lenders,
and the Borrower, on behalf of the Loan Parties, may from time to time enter
into written agreements amending or changing any provision of this Agreement or
any other Loan Document or the rights of the Lenders or the Loan Parties
hereunder or thereunder, or may grant written waivers or consents hereunder or
thereunder. Any such agreement, waiver or consent made with such written consent
shall be effective to bind all the Lenders and the Loan Parties; provided, that
no such agreement, waiver or consent may be made which will:

11.2.1 Increase of Commitment. Increase the amount of the Revolving Credit
Commitment of any Lender hereunder without the consent of such Lender;

11.2.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment. Whether or not any Loans are outstanding,
extend the Expiration Date or the time for payment of principal or interest of
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date of any mandatory prepayment of a Loan), the Commitment Fee or any other fee
payable to any Lender, or reduce the principal amount of or the rate of interest
borne by any Loan or reduce the Commitment Fee or any other fee payable to any
Lender, without the consent of each Lender directly affected thereby;

11.2.3 Release of Collateral or Guarantor. Except for (i) the release of
Collateral and Guarantors as provided in Section 10.10 [Authorization to Release
Collateral and Guarantors], (ii) sales of assets permitted by Section 8.2.7
[Disposition of Assets or Subsidiaries] or 8.2.6 [Liquidations, Mergers,
Consolidations, Acquisitions] and (iii) the release of any Guarantor from its
obligations under the Guaranty Agreement if the ownership interests in such
Guarantor are sold or otherwise disposed of or transferred to persons other than
Loan Parties or Subsidiaries of the Loan Parties in a transaction permitted
under Section 8.2.7 [Disposition of Assets or Subsidiaries] or 8.2.6
[Liquidations, Mergers, Consolidations, Acquisitions], release all or
substantially all of the Collateral or any Guarantor from its Obligations under
the Guaranty Agreement without the consent of all Lenders (other than Defaulting
Lenders); or

11.2.4 Miscellaneous. Amend Section 5.2 [Pro Rata Treatment of Lenders], 10.3
[Exculpatory Provisions] or 5.3 [Sharing of Payments by Lenders] or this
Section 11.2, alter any provision regarding the pro rata treatment of the
Lenders or requiring all Lenders to authorize the taking of any action or reduce
any percentage specified in the definition of Required Lenders, in each case
without the consent of all of the Lenders (other than Defaulting Lenders);

provided that no agreement, waiver or consent which would modify the interests,
rights or obligations of the Administrative Agent or the Issuing Lender may be
made without the written consent of such Administrative Agent or Issuing Lender,
as applicable, and provided, further that, if in connection with any proposed
waiver, amendment or modification referred to in Sections 11.2.1 through 11.2.4
above, the consent of the Required Lenders is obtained but the consent of one or
more of such other Lenders whose consent is required is not obtained (each a
“Non-Consenting Lender”), then the Borrower shall have the right to replace any
such Non-Consenting Lender with one or more replacement Lenders pursuant to
Section 5.6.2 [Replacement of a Lender].

11.3 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay
or failure of the Administrative Agent or any Lender in exercising any right,
power, remedy or privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any further exercise
thereof or of any other right, power, remedy or privilege. The rights and
remedies of the Administrative Agent and the Lenders under this Agreement and
any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have.

11.4 Expenses; Indemnity; Damage Waiver.

11.4.1 Costs and Expenses. The Borrower shall pay (i) all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable and documented fees, charges and
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Administrative Agent), and shall pay all reasonable and documented fees and time
charges and disbursements for attorneys who may be employees of the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable and documented out-of-pocket expenses incurred
by the Issuing Lender in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder,
(iii) all reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the Issuing Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Lender or the Issuing Lender), and shall pay all fees and time charges for
attorneys who may be employees of the Administrative Agent, any Lender or the
Issuing Lender, in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the other Loan Documents, including
its rights under this Section, or (B) in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or similar negotiations in respect of
such Loans or Letters of Credit, and (iv) all reasonable and documented
out-of-pocket expenses of the Administrative Agent’s regular employees and
agents engaged periodically to perform audits of the Loan Parties’ books,
records and business properties; provided however that, absent the occurrence
and during the continuance of an Event of Default, the Borrower shall not be
obligated to pay the costs, expenses or fees of more than two (2) such audits
per fiscal year.

11.4.2 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless each Indemnitee from all fees and time charges
and disbursements for attorneys who may be employees of any Indemnitee, incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance or nonperformance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the Issuing
Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) breach of representations, warranties or
covenants of the Borrower under the Loan Documents, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, including any such items or losses relating to or arising under
Environmental Laws or pertaining to environmental matters, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
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negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction. This Section 11.4.2 [Indemnification by the Borrower]
shall not apply with respect to Taxes other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim.

11.4.3 Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under Sections 11.4.1 [Costs and
Expenses] or 11.4.2 [Indemnification by the Borrower] to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Issuing Lender or any
Related Party of any of the foregoing, each Lender severally agrees to pay to
the Administrative Agent (or any such sub-agent), the Issuing Lender or such
Related Party, as the case may be, such Lender’s Ratable Share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) or the Issuing Lender in its capacity as such, or against any Related
Party of any of the foregoing acting for the Administrative Agent (or any such
sub-agent) or Issuing Lender in connection with such capacity.

11.4.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in Section 11.4.2
[Indemnification by Borrower] shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

11.4.5 Payments. All amounts due under this Section shall be payable not later
than ten (10) days after demand therefor.

11.5 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day (except as provided in Section 4.2 [Interest Periods]) and such
extension of time shall be included in computing interest and fees, except that
the Loans shall be due on the Business Day preceding the Expiration Date if the
Expiration Date is not a Business Day. Whenever any payment or action to be made
or taken hereunder (other than payment of the Loans) shall be stated to be due
on a day which is not a Business Day, such payment or action shall be made or
taken on the next following Business Day, and such extension of time shall not
be included in computing interest or fees, if any, in connection with such
payment or action.

 

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11.6 Notices; Effectiveness; Electronic Communication.

11.6.1 Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
Section 11.6.2 [Electronic Communications]), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier (i) if to a Lender, to it at its address set forth in its
administrative questionnaire, or (ii) if to any other Person, to it at its
address set forth on Schedule 1.1(B).

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 11.6.2 [Electronic Communications], shall be effective as
provided in such Section.

11.6.2 Electronic Communications. Notices and other communications to the
Lenders and the Issuing Lender hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender or the Issuing Lender if such
Lender or the Issuing Lender, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

11.6.3 Change of Address, Etc. Any party hereto may change its address, e-mail
address or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.

11.7 Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

 

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11.8 Duration; Survival. All representations and warranties of the Loan Parties
contained herein or made in connection herewith shall survive the execution and
delivery of this Agreement. All covenants and agreements of the Borrower
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in the Notes, Section 5 [Payments] and Section 11.4 [Expenses; Indemnity;
Damage Waiver], shall survive Payment In Full. All other covenants and
agreements of the Loan Parties shall continue in full force and effect from and
after the date hereof and until Payment In Full.

11.9 Successors and Assigns.

11.9.1 Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of Section 11.9.2 [Assignments by Lenders],
(ii) by way of participation in accordance with the provisions of Section 11.9.4
[Participations], or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 11.8.6 [Certain Pledges; Successors and
Assigns Generally] (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 11.9.4 [Participations] and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

11.9.2 Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in clause (i)(A) of this Section 11.9.2, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
Agreement with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption
Agreement, as of the Trade Date) shall not be less than $5,000,000, in the case
of any assignment

 

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in respect of the Revolving Credit Commitment unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned.

(iii) Required Consents. No consent shall be required for any assignment except
for the consent of the Administrative Agent (which shall not be unreasonably
withheld or delayed) and:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five (5) Business
Days after having received notice thereof; and

(B) the consent of the Issuing Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding).

(iv) Assignment and Assumption Agreement. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption
Agreement, together with a processing and recordation fee of $3,500, and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
administrative questionnaire provided by the Administrative Agent.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 11.9.3 [Register], from and after the effective date specified in
each Assignment and Assumption Agreement, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption Agreement, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption Agreement, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 4.4
[LIBOR Rate Unascertainable; Etc.], 5.8 [Increased Costs], and 11.4 [Expenses,
Indemnity; Damage Waiver] with respect to facts and circumstances occurring
prior to the effective date of such assignment. Any assignment or transfer by a
Lender of rights or

 

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obligations under this Agreement that does not comply with this Section 11.9.2
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 11.9.4
[Participations].

11.9.3 Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain a record of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans owing to,
each Lender pursuant to the terms hereof from time to time. Such register shall
be conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is in such register pursuant to the terms hereof as
a Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. Such register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

11.9.4 Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Lenders, and the Issuing Lender shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
(other than as is already provided for herein) to any amendment, modification or
waiver with respect to Sections 11.1.1 [Increase of Commitment], 11.2.2
[Extension of Payment, Etc.], or 11.2.3 [Release of Collateral or Guarantor])
that affects such Participant. The Borrower agrees that each Participant shall
be entitled to the benefits of Sections 4.4 [Libor Rate Unascertainable, Etc.],
5.8 [Increased Costs], 5.10 [Indemnity] and 5.9 [Taxes] (subject to the
requirements and limitations therein, including the requirements under
Section 5.9.7 [Status of Lenders] (it being understood that the documentation
required under Section 5.9.7 [Status of Lenders] shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 11.8.2 [Assignments by
Lenders]; provided that such Participant (A) agrees to be subject to the
provisions of Section 5.6.2 [Replacement of a Lender] as if it were an assignee
under Section 11.8.2 [Assignments by Lenders]; and (B) shall not be entitled to
receive any greater payment under Sections 5.8 [Increased Costs] or 5.9 [Taxes],
with respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Participant acquired
the applicable participation. Each Lender that sells participation agrees, at
the Borrower’s request and expense, to use reasonable efforts to cooperate with
the Borrower to effectuate the provisions of Section 5.6.2 [Replacement of a
Lender] with respect to any Participant. To the

 

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extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.2.3 [Set-off] as though it were a Lender; provided that such
Participant agrees to be subject to Section 5.3 [Sharing of Payments by Lenders]
as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as an agent of the Borrower, maintain a register on
which it enters the name and address of each Participant and the principal
amounts (and stated interest) of each Participant’s interest in the Loans or
other obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

11.9.5 Certain Pledges; Successors and Assigns Generally. Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including any pledge
or assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

11.10 Confidentiality.

11.10.1 General. Each of the Administrative Agent, the Lenders and the Issuing
Lender agrees to maintain the confidentiality of the Information, except that
Information may be disclosed (i) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (iii) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process,
(iv) to any other party hereto, (v) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (vi) subject to an agreement containing
provisions substantially the same as those of this Section, to (A) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (B) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (vii) with the consent of the Borrower or
(viii) to the extent such Information (Y) becomes publicly available other than
as a result of a breach of this Section or (Z) becomes available to the
Administrative Agent, any Lender, the Issuing Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower or
the other Loan Parties. Any Person required to

 

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maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

11.10.2 Sharing Information With Affiliates of the Lenders. Each Loan Party
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Affiliates (in connection with this Agreement or otherwise) by any Lender or by
one or more Subsidiaries or Affiliates of such Lender and each of the Loan
Parties hereby authorizes each Lender to share any information delivered to such
Lender by such Loan Party and its Subsidiaries pursuant to this Agreement to any
such Subsidiary or Affiliate subject to the provisions of Section 11.10.1
[General].

11.11 Counterparts; Integration; Effectiveness.

11.11.1 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents,
and any separate letter agreements with respect to fees payable to the
Administrative Agent, constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof including
any prior confidentiality agreements and commitments. Except as provided in
Section 7 [Conditions Of Lending And Issuance Of Letters Of Credit], this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or e-mail shall be effective as delivery of a
manually executed counterpart of this Agreement.

11.12 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF
PROCESS; WAIVER OF JURY TRIAL.

11.12.1 Governing Law. This Agreement shall be deemed to be a contract under the
Laws of the State of New York without regard to its conflict of laws principles.
Each standby Letter of Credit issued under this Agreement shall be subject
either to the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the “ICC”)
at the time of issuance (“UCP”) or the rules of the International Standby
Practices (ICC Publication Number 590) (“ISP98”), as determined by the Issuing
Lender, and each trade Letter of Credit shall be subject to UCP, and in each
case to the extent not inconsistent therewith, the Laws of the State of New York
without regard to is conflict of laws principles.

11.12.2 SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF

 

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THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT,
ANY LENDER OR THE ISSUING LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

11.12.3 WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 11.12. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.

11.12.4 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.6 [NOTICES;
EFFECTIVENESS; ELECTRONIC COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

11.12.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE

 

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FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

11.13 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act
and the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies Loan Parties that pursuant to the requirements of the USA Patriot Act,
it is required to obtain, verify and record information that identifies the Loan
Parties, which information includes the name and address of Loan Parties and
other information that will allow such Lender or Administrative Agent, as
applicable, to identify the Loan Parties in accordance with the USA Patriot Act.

 

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

 

ATTEST:     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

[SIGNTURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

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

BITE, INC. By:  

/s/ Jeffrey J. Lasher

Name: Jeffrey J. Lasher Title: Chief Financial Officer

[SIGNTURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

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

PNC BANK, NATIONAL ASSOCIATION, as a

Lender and as Administrative Agent

By:  

/s/ Steve Roberts

Name: Steve Roberts Title: Vice President JPMORGAN CHASE BANK, as Lender By:  

/s/ Donatell Scanniello

Name: Donatella Scanniello Title: SVP WELLS FARGO BANK N.A., as Lender By:  

/s/ Ariana Fahrney

Name: Ariana Fahrney Title: Assistant Vice President

[SIGNTURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

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

SCHEDULE 1.1(A)

PRICING GRID—

VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO

 

Level

    

[Leverage Ratio]

 

Letter of

Credit Fee

 

Revolving Credit Base

Rate Spread

 

Revolving Credit

LIBOR Rate Spread

I

     Less than 1.0 to 1.0   1.75%   0.75%   1.75%

II

     Greater than or equal to 1.0 to 1.0 but less than 1.50 to 1.0   2.00%  
1.00%   2.00%

III

     Greater than or equal to 1.50 to 1.0 but less than 2.00 to 1.0   2.25%  
1.25%   2.25%

IV

     Greater than or equal to 2.0 to 1.0   2.50%   1.50%   2.50%

For purposes of determining the Applicable Margin and the Applicable Letter of
Credit Fee Rate:

(a) The Applicable Margin and the Applicable Letter of Credit Fee Rate shall be
determined on the Closing Date based on the Leverage Ratio computed on such date
pursuant to a Compliance Certificate to be delivered on the Closing Date.

(b) The Applicable Margin and the Applicable Letter of Credit Fee Rate shall be
recomputed as of the end of each fiscal quarter ending after the Closing Date
based on the Leverage Ratio as of such quarter end. Any increase or decrease in
the Applicable Margin or the Applicable Letter of Credit Fee Rate computed as of
a quarter end shall be effective on the date on which the Compliance Certificate
evidencing such computation is due to be delivered under Section 8.3.3
[Certificate of Borrower]. If a Compliance Certificate is not delivered when due
in accordance with such Section 8.3.3, then the rates in Level IV shall apply as
of the first Business Day after the date on which such Compliance Certificate
was required to have been delivered and shall remain in effect until the date on
which such Compliance Certificate is delivered.

(c) If, as a result of any restatement of or other adjustment to the financial
statements of the Borrower or for any other reason, the Borrower or the Lenders
determine that (i) the Leverage Ratio as calculated by the Borrower as of any
applicable date was inaccurate and (ii) a proper calculation of the Leverage
Ratio would have resulted in higher pricing for such period, the Borrower shall
immediately and retroactively be obligated to pay to the Administrative Agent
for the account of the applicable Lenders, promptly on demand by the
Administrative Agent (or, after the occurrence of an actual or deemed entry of
an order for relief with respect to the Borrower under the Bankruptcy Code of
the United States, automatically and without further action by the
Administrative Agent, any Lender or the Issuing Lender), an amount equal to the
excess of the amount of interest and fees that should have been paid for such
period over the amount of interest and fees actually paid for such period. This
paragraph shall not limit the

 

SCHEDULE 1.1(A) - 1

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

rights of the Administrative Agent, any Lender or the Issuing Lender, as the
case may be, under Section 2.8 [Letter of Credit Subfacility] or 4.3 [Interest
After Default] or 9 [Default]. The Borrower’s obligations under this paragraph
shall survive the termination of the Commitments and the repayment of all other
Obligations hereunder.

APPLICABLE COMMITMENT FEE BASED ON REVOLVING FACILITY

USAGE

 

     Revolving Facility Usage >
50% of aggregate Revolving
Credit Commitments   Revolving Facility Usage <
50% of aggregate Revolving
Credit Commitments

Applicable Commitment Fee Rate

   .25%   .375%

For purposes of determining the Applicable Commitment Fee Rate:

(a) The Applicable Commitment Fee Rate shall be determined on the Closing Date
based on the Revolving Facility Usage computed on such date.

(b) The Applicable Commitment Fee Rate shall be recomputed as of the end of each
fiscal quarter ending after the Closing Date based on the average Revolving
Facility Usage for such fiscal quarter. Any increase or decrease in the
Applicable Commitment Fee Rate computed as of a quarter end shall be effective
on such date.

 

SCHEDULE 1.1(A) - 2

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

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 1 of 2

Part 1 – Commitments of Lenders and Addresses for Notices to Lenders

 

Lender

   Amount of
Commitment
for Revolving
Credit Loans      Commitment      Ratable Share  

PNC Bank, National Association

2 North Lake Avenue, Suite 440

Pasadena, CA 91101

Attention: Steve Roberts

Telephone: 626-432-6128

Telecopy: 626-432-4589

   $ 45,000,000       $ 45,000,000         64.285714286 % 

Wells Fargo Bank N.A.

333 S. Grand Ave. , Suite 800

Los Angeles, CA 90071

Attention: VP / Relationship Manager

Telephone: 213-253-3571

Telecopy: 213-625-1055

   $ 15,000,000       $ 15,000,000         21.428571429 % 

JPMorgan Chase Bank

1125 17th Street, 3rd Floor

Denver, CO 80202

Attention: Norma Dally

Telephone: 303-244-3137

Telecopy: 303-244-3105

   $ 10,000,000       $ 10,000,000         14.285714286 % 

Total

   $ 70,000,000       $ 70,000,000         100 % 

 

SCHEDULE 1.1(B) - 1

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

SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 2 of 2

Part 2 – Addresses for Notices to Administrative Agent, Borrower and Guarantors:

ADMINISTRATIVE AGENT

PNC Bank, National Association

2 North Lake Avenue, Suite 440

Pasadena, CA 91101

Attention: Steve Roberts

Telephone: 626-432-6128

Telecopy: 626-432-4589

With a Copy To:

Agency Services, PNC Bank, National Association

Mail Stop: P7-PFSC-04-I

Address: 500 First Avenue

Pittsburgh, PA 15219

Attention: Agency Services

Telephone: 412-762-6442

Telecopy: 412-762-8672

BORROWER:

Crocs, Inc.

6328 Monarch Park Place

Niwot, CO 80503

Attention: Mario Pasquale

Telephone: 303-848-7576

Telecopy: 303-848-7010

With a copy to:

Perkins Coie LLP

1900 Sixteenth Street, Suite 1400

Denver, CO 80202

Attention: Jeffrey A. Beuche

Telephone: (303) 291-2321

Facsimile: (303) 291-242

 

SCHEDULE 1.1(B) - 2

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

SCHEDULE 1.1(P)

PERMITTED LIENS

The following Uniform Commercial Code liens that exist on the assets of the
Borrowers:

 

Debtor

  

Secured Party

  

State/UCC No./

Filing Date

  

Assets Subject to Lien

Crocs, Inc.    Key Equipment Finance Inc.   

Delaware

2007 3850756

October 12, 2007

   Equipment named therein, including proceeds, inventory and related accounts
Crocs, Inc.    AT&T Capital Services, Inc.   

Delaware

2009 4080021

December 21, 2009

   Telecommunications and data equipment under Schedule No. 001-4571100-005
Crocs, Inc.    AT&T Capital Services, Inc.   

Delaware

2009 4080039

December 21, 2009

   Telecommunications and data equipment under Schedule No. 001-4571100-005
Crocs, Inc.    AT&T Capital Services, Inc.   

Delaware

2010 0906085

March 17, 2010

   Telecommunications and data equipment leased, licensed or otherwise provided
to Crocs, Inc. by AT&T Capital Services, Inc. Crocs, Inc.    General Electric
Capital Corporation   

Delaware

2010 1958598

June 4, 2010

   Equipment leased or financed under the Total Image Management Agreement No.
7679605-001

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SCHEDULE 6.1.1

QUALIFICATIONS TO DO BUSINESS

 

Entity

  

Jurisdictions

Crocs, Inc.

  

Arizona

California

Colorado

Connecticut

Delaware

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Kansas

Kentucky

Maryland

Massachusetts

Michigan

Missouri

Nebraska

New Jersey

North Carolina

Ohio

Pennsylvania

South Carolina

Tennessee

Texas

Utah

Washington

Wisconsin

Crocs Retail, Inc.

  

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

District of Columbia

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

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Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Puerto Rico

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Ocean Minded, Inc.

  

California

Colorado

Jibbitz, LLC

   Colorado

Bite, Inc.

  

Colorado

South Carolina

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SCHEDULE 6.1.2

SUBSIDIARIES

 

Subsidiary

  

Jurisdiction

  

Outstanding Equity Interests

  

Holder(s) of Equity

Interests/Percentage Ownership

Western Brands Holding Company

   Colorado    50,000 common shares    Crocs, Inc. – 100%

Crocs Retail, Inc.

   Colorado    100,000 shares of common stock    Crocs, Inc. – 100%

Fury, Inc.

   Colorado    50,000 shares of common stock    Crocs, Inc. – 100%

RA Footwear, LLC

   Colorado    Membership Interests    Crocs, Inc. – 100%

Western Brands Netherlands Holding C.V.

   Netherlands    N/A   

Crocs, Inc. – 80.48%

Western Brands Holding Company

– 19.52%

Crocs Puerto Rico, Inc.

   Puerto Rico    1 common share    Crocs, Inc. – 100%

Crocs Marine Ltd.

   Cayman Islands    1 share    Crocs, Inc. – 100%

4246619 Canada Inc.

   Canada    4,926,000 common shares    Western Brands Netherlands Holding C.V.
– 100%

Ocean Minded, Inc.

   Colorado    50,000 shares of common stock    Western Brands Netherlands
Holding C.V. – 100%

Jibbitz, LLC

   Colorado    Membership Interests    Western Brands Netherlands Holding C.V. –
100%

Bite, Inc.

   Colorado    50,000 shares    Western Brands Netherlands Holding C.V. – 100%

Crocs General Partner LLC

   Delaware    Membership Interests   

Western Brands Netherlands Holding C.V. – 0.56%

Western Brands Holding Company – 99.44%

Colorado Footwear C.V.

   Netherlands    N/A   

Western Brands Netherlands Holding C.V. – 99.97%

Crocs General Partner LLC – 0.03%

Crocs Canada Inc.

   Canada   

54,320 Class A shares; 52,000 Class B shares; 135,316 Class C

shares

   4246619 Canada Inc. – 100%

Exo Italia S.R.L.

   Italy    N/A    Colorado Footwear C.V. – 100%

Crocs Europe B.V.

   Netherlands    18,000 shares    Colorado Footwear C.V. – 100%

Crocs Brazil Comercio de Calcados Ltda

   Brazil    21,193,817 (quotas)   

Colorado Footwear C.V. – 99.99%

Crocs US Latin American Holdings, LLC – 0.0000005%

Crocs US Latin American Holdings, LLC

   Delaware    Membership Interests    Colorado Footwear C.V. – 100%

Crocs Stores B.V.

   Netherlands    18,000 shares    Crocs Europe B.V. – 100%

Crocs Germany GmbH

   Germany    1 share    Crocs Europe B.V. – 100%

Crocs UK Limited

   United Kingdom    1,000 shares    Crocs Europe B.V. – 100%

Crocs France S.A.R.L.

   France    100,000 shares    Crocs Europe B.V. – 100%

Crocs Nordic OY

   Finland    2,500 shares    Crocs Europe B.V. – 100%

Crocs BH LLC

   Bosnia-Herzgovina    N/A    Crocs Europe B.V. – 100%

LLC Crocs CIS

   Russia    N/A   

Crocs Europe B.V. – 99%

Crocs Stores B.V. – 1%

Panama Footwear S. De R.L.

   Panama    N/A   

Crocs Europe B.V. – 99%

Colorado Footwear C.V. – 1%

Crocs NL Latin American Holdings B.V.

   Netherlands    N/A    Crocs Brazil Comercio de Calcados Ltda – 100%

Crocs Stores OY

   Finland    2,500 shares    Crocs Nordic OY – 100%

Crocs Stores AB

   Sweden    N/A    Crocs Nordic OY – 100%

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

Crocs Mexico SRL de CV

   Mexico    N/A   

Crocs NL Latin American Holdings B.V. – 99.99%

Crocs US Latin American Holdings, LLC – 0.0000006%

Crocs Servicios SRL de CV

   Mexico    N/A   

Crocs NL Latin American Holdings B.V. – 99.97%

Crocs US Latin American Holdings, LLC – 0.33%

Crocs Argentina S.R.L.

   Argentina    N/A   

Crocs NL Latin American Holdings B.V. – 89.95%

Crocs US Latin American Holdings, LLC – 10.05%

Crocs Chile Ltda.

   Chile    N/A   

Crocs NL Latin American Holdings B.V. – 99%

Crocs US Latin American Holdings, LLC – 1%

Crocs Asia Pte Ltd.

   Singapore    N/A    Colorado Footwear C.V. – 100%

Crocs Asia Pte Ltd.

   Taiwan    N/A    Crocs Asia Pte Ltd. – 100%

Crocs Asia Pte Ltd.

   Japan    N/A    Crocs Asia Pte Ltd. – 100%

Crocs Korea Pte Ltd.

   South Korea    50,000 shares    Crocs Asia Pte Ltd. – 100%

Crocs Hong Kong Ltd.

   Hong Kong    N/A    Crocs Asia Pte Ltd. – 100%

Crocs Malaysia Sdn Bhd

   Malaysia    99,998 shares    Crocs Asia Pte Ltd. – 100%

Crocs Japan GK

   Japan    N/A    Crocs Asia Pte Ltd. – 100%

Crocs Trading (Shanghai) Co. Ltd.

   China    N/A    Crocs Hong Kong Ltd. – 100%

Crocs Japan GK

   Taiwan    N/A    Crocs Japan GK – 100%

Crocs Industrial (Hong Kong) Co. Ltd.

   Hong Kong    N/A    Crocs Japan GK – 100%

Crocs Singapore Pte Ltd.

   Singapore    1 share    Crocs Japan GK – 100%

Crocs India Private Limited

   India    N/A    Crocs Japan GK – 100%

Crocs New Zealand

   New Zealand    N/A    Crocs Japan GK – 100%

Crocs Australia Pty Ltd.

   Australia    N/A    Crocs Japan GK – 100%

Crocs South Africa

(Proprietary) Limited

   South Africa    928 shares    Crocs Japan GK – 100%

Crocs Industrial (Shenzhen) Co. Ltd.

   China    N/A    Crocs Industrial (Hong Kong) Co. Ltd. – 100%

Heirs & Grace Pty Ltd.

   Australia    N/A    Crocs Australia Pty Ltd. – 100%

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SCHEDULE 6.1.5

LITIGATION

The Borrowers are subject to litigation from time to time in the ordinary course
of business, including employment, intellectual property and product liability
claims. The Borrowers are not currently party to pending legal proceedings that
the Company believes, if adversely determine, could result in a material Adverse
Change, with the following possible exceptions:

 

1. In re Crocs Securities Litigation, Case No. 07-CV-02351-REB-KLM (consolidated
with Case Nos. 07-CV-02412-MSK, 07-CV-02454-EWN, 07-CB-02465-WYD and
07-CV-02469-DEM). Crocs, Inc. and certain current and former officers and
directors have been named as defendants in complaints filed by investors in the
United States District Court for the District of Colorado. The first complaint
was filed in November 2007 and several other complaints were filed shortly
thereafter. These actions were consolidated and, in September 2008, the District
Court appointed a lead plaintiff and counsel. An amended consolidated complaint
was filed in December 2008. The amended complaint purports to state claims under
Section 10(b), 20(a), and 20A of the Exchange Act on behalf of a class of all
persons who purchased our common stock between April 2, 2007 and April 14, 2008
(the “Class Period”). The amended complaint also added Crocs, Inc.’s independent
auditor as a defendant. The amended complaint alleges that, during the
Class Period, the defendants made false and misleading public statements about
Crocs, Inc. and its business and prospects and, as a result, the market price of
its common stock was artificially inflated. The amended complaint also claims
that certain current and former officers and directors traded in Crocs, Inc.’s
common stock on the basis of material non-public information. The amended
complaint seeks compensatory damages on behalf of the alleged class in an
unspecified amount, including interest, and also added attorneys’ fees and costs
of litigation. On February 28, 2011, the District Court granted motions to
dismiss filed by the defendants and dismissed all claims. A final judgment was
thereafter entered. Plaintiffs have appealed and are challenging the court’s
February 28, 2011 order in the United States Court of Appeals for the Tenth
Circuit.

 

2. On October 27, 2010, Spectrum Agencies (“Spectrum”) filed suit against Crocs,
Inc.’s subsidiary, Crocs Europe B.V. (“Crocs Europe”), in the High Court of
Justice, Queen’s Bench Division, Royal Courts of Justice in London, United
Kingdom. Spectrum alleges that Crocs Europe unlawfully terminated its agency
agreement with them and failed to pay them certain sales commissions. On
December 23, 2010, Crocs Europe submitted its response to Spectrum’s claim to
the High Court of Justice. On December 16, 2011, the High Court of Justice
issued a ruling in favor of Spectrum on the merits.

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SCHEDULE 6.1.14

ENVIRONMENTAL DISCLOSURES

None.

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SCHEDULE 8.1.3

INSURANCE REQUIREMENTS RELATING TO THE COLLATERAL

COVENANTS:

At the request of the Administrative Agent, the Loan Parties shall deliver to
the Administrative Agent and each of the Lenders (x) on the Closing Date and
annually thereafter an original certificate of insurance signed by the Loan
Parties’ independent insurance broker describing and certifying as to the
existence of the insurance on the Collateral required to be maintained by this
Agreement and the other Loan Documents, together with a copy of the endorsement
described in the next sentence attached to such certificate, and (y) from time
to time a summary schedule indicating all insurance then in force with respect
to each of the Loan Parties. Such policies of insurance shall contain special
endorsements which include the provisions set forth below or are otherwise in
form acceptable to the Administrative Agent in its reasonable discretion. The
applicable Loan Parties shall notify the Administrative Agent promptly of any
occurrence causing a material loss or decline in value of the Collateral and the
estimated (or actual, if available) amount of such loss or decline. Any monies
received by the Administrative Agent constituting insurance proceeds may, at the
option of the Administrative Agent, (i) in the case of property insurance
proceeds received during the existence of an Event of Default, be applied by the
Administrative Agent to the payment of the Obligations in accordance with the
terms of the Credit Agreement, (ii) for losses of less than
$            received at such time as no Event of Default or Potential Default
exists, be disbursed by the Administrative Agent to the applicable Loan Parties,
and (iii) for losses equal to or greater than $            received at such time
as no Event of Default or Potential Default exists, be disbursed by the
Administrative Agent to the applicable Loan Parties on such terms as are deemed
appropriate by the Administrative Agent for the repair, restoration and/or
replacement of Collateral and other property in respect of which such proceeds
were received.

ENDORSEMENT:

(i) specify the Administrative Agent as an additional insured, mortgagee and
lender loss payee as its interests may appear,

(ii) with respect to all property insurance policies, provide that the interest
of the Lenders shall be insured regardless of any breach or violation by the
applicable Loan Parties of any warranties, declarations or conditions contained
in such policies or any action or inaction of the applicable Loan Parties or
others insured under such policies, except that the insurer shall not be
obligated to maintain the insurance if the breach consists of non-payment of
premiums which continues for 30 days after written notice to Administrative
Agent,

(iii) provide a waiver of any right of the insurers to set off or counterclaim
or any other deduction, whether by attachment or otherwise,

(iv) provide that any and all rights of subrogation which the insurers may have
or acquire against the Loan Parties shall be, at all times and in all respects,
junior and subordinate to the prior Payment In Full of the Indebtedness
hereunder and that no insurer shall exercise or assert any right of subrogation
until such time as the Indebtedness hereunder has been paid in full and the
Commitments have terminated,

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

(v) provide that no cancellation of such policies for any reason (including
non-payment of premium) nor any change therein shall be effective until at least
thirty (30) days after receipt by the Administrative Agent of written notice of
such cancellation or change,

(vi) be primary without right of contribution of any other insurance carried by
or on behalf of any additional insureds with respect to their respective
interests in the Collateral, and

(vii) provide that inasmuch as the policy covers more than one insured, all
terms, conditions, insuring agreements and endorsements (except limits of
liability) shall operate as if there were a separate policy covering each
insured.

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SCHEDULE 8.2.1

PERMITTED INDEBTEDNESS

None.

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SCHEDULE 8.2.4

LOANS AND INVESTMENTS

None.

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EXHIBIT 1.1(A)

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of             , 200    , by
[            ] (the “Transferor Lender”), [            ], (the “Purchasing
Lender”), and PNC Bank, National Association, as administrative agent for the
Lenders under the Amended and Restated Credit Agreement described below (in such
capacity, the “Administrative Agent”).

W I T N E S S E T H

WHEREAS, this Assignment and Assumption Agreement is being executed and
delivered in accordance with Section 11.9.2 of that certain Amended and Restated
Credit Agreement dated as of December 16, 2011 (as may be amended, supplemented
or otherwise modified from time to time in accordance with the terms thereof,
the “Credit Agreement”) by and among CROCS, INC., CROCS RETAIL, INC., OCEAN
MINDED, INC., JIBBITZ, LLC, BITE, INC. (collectively with any other Person
joined as a borrower thereto from time to tiem, the “Borrowers” and each a
“Borrower”), the financial institutions which are now or which hereafter become
a party thereto (collectively, the “Lenders”) and the Administrative Agent.

WHEREAS, Purchasing Lender wishes to become a Lender party to the Credit
Agreement; and

WHEREAS, the Transferor Lender is selling and assigning to Purchasing Lender
rights, obligations and commitments under the Credit Agreement;

NOW, THEREFORE, the parties hereto hereby agree as follows:

All capitalized terms used herein which are not defined shall have the meanings
given to them in the Credit Agreement.

1. Upon receipt by the Administrative Agent of four (4) counterparts of this
Assignment and Assumption Agreement, to each of which is attached a fully
completed Schedule I, and each of which has been executed by the Transferor
Lender, the Purchasing Lender and Administrative Agent, Administrative Agent
will transmit to Transferor Lender and Purchasing Lender a Transfer Effective
Notice, substantially in the form of Schedule II to this Assignment and
Assumption Agreement (a “Transfer Effective Notice”). Such Transfer Effective
Notice shall set forth, inter alia, the date on which the transfer effected by
this Assignment and Assumption Agreement shall become effective (the “Transfer
Effective Date”), which date unless otherwise noted therein, shall not be
earlier than the first Business Day following the date such Transfer Effective
Notice is received. From and after the Transfer Effective Date, Purchasing
Lender shall be a Lender party to the Credit Agreement for all purposes thereof.

2. At or before 12:00 Noon (New York time) on the Transfer Effective Date,
Purchasing Lender shall pay to Transferor Lender, in immediately available
funds, an amount

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

equal to the purchase price, as agreed between Transferor Lender and such
Purchasing Lender (the “Purchase Price”), of the portion of the Loans being
purchased by such Purchasing Lender (such Purchasing Lender’s “Purchased
Percentage”) of the outstanding Loans and other amounts owing to the Transferor
Lender under the Credit Agreement and the Note(s) of Transferor Lender.
Effective upon receipt by Transferor Lender of the Purchase Price from a
Purchasing Lender, Transferor Lender hereby irrevocably sells, assigns and
transfers to such Purchasing Lender, without recourse, representation or
warranty, and Purchasing Lender hereby irrevocably purchases, takes and assumes
from Transferor Lender, such Purchasing Lender’s Purchased Percentage of the
Loans and other amounts owing to the Transferor Lender under the Credit
Agreement and such Note(s) together with all instruments, documents and
collateral security pertaining thereto.

3. Transferor Lender has made arrangements with Purchasing Lender with respect
to (i) the portion, if any, to be paid, and the date or dates for payment, by
Transferor Lender to such Purchasing Lender of any fees heretofore received by
Transferor Lender pursuant to the Credit Agreement prior to the Transfer
Effective Date and (ii) the portion, if any, to be paid, and the date or dates
of payment, by such Purchasing Lender to Transferor Lender of fees or interest
received by such Purchasing Lender pursuant to the Credit Agreement from and
after the Transfer Effective Date.

4. All principal payments that would otherwise be payable from and after the
Transfer Effective Date to or for the account of Transferor Lender pursuant to
the Credit Agreement and the Note(s) of Transferor Lender shall, instead, be
payable to or for the account of Transferor Lender and Purchasing Lender, as the
case may be, in accordance with their respective interests as reflected in this
Assignment and Assumption Agreement.

5. All interest, fees and other amounts that would otherwise accrue for the
account of Transferor Lender from and after the Transfer Effective Date pursuant
to the Credit Agreement and the Note(s) of Transferor Lender shall, instead,
accrue for the account of, and be payable to, Transferor Lender and Purchasing
Lender, as the case may be, in accordance with their respective interests as
reflected in this Assignment and Assumption Agreement. In the event that any
amount of interest, fees or other amounts accruing prior to the Transfer
Effective Date was included in the Purchase Price paid by any Purchasing Lender,
Transferor Lender and Purchasing Lender will make appropriate arrangements for
payment by Transferor Lender to such Purchasing Lender of such amount upon
receipt thereof from Borrower.

6. Concurrently with the execution and delivery hereof, Transferor Lender will
provide to Purchasing Lender conformed copies of the Credit Agreement and all
related documents delivered to Transferor Lender.

7. Each of the parties to this Assignment and Assumption Agreement agrees that
at any time and from time to time upon the written request of any other party,
it will execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Assignment and Assumption Agreement.

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

8. By executing and delivering this Assignment and Assumption Agreement,
Transferor Lender and Purchasing Lender confirm to and agree with each other and
Administrative Agent and Lenders as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned hereby free and clear of any adverse claim, Transferor Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, the Note(s) of
Transferor Lender or any other instrument or document furnished pursuant
thereto; (ii) Transferor Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of Borrowers or the
performance or observance by Borrowers of any of the Obligations under the
Credit Agreement, the Note(s) or any other instrument or document furnished
pursuant hereto; (iii) Purchasing Lender confirms that it has received a copy of
the Credit Agreement, together with copies of such financial statements and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption
Agreement; (iv) Purchasing Lender will, independently and without reliance upon
Administrative Agent, Transferor Lender or any other Lenders and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (v) Purchasing Lender appoints and authorizes Administrative Agent on
its behalf to take such action as agent and to exercise such powers under the
Credit Agreement and Other Documents as are delegated to the Administrative
Agent by the terms thereof; (vi) Purchasing Lender agrees that it will perform
all of its respective obligations as set forth in the Credit Agreement and Other
Documents to be performed by each as a Lender; and (vii) Purchasing Lender
represents and warrants to Transferor Lender, Lenders, Administrative Agent and
Borrower that it is either (x) entitled to the benefits of an income tax treaty
with the United States of America that provides for an exemption from the United
States withholding tax on interest and other payments made by Borrower under the
Credit Agreement and Other Documents or (y) is engaged in trade or business
within the United States of America.

9. Schedule I hereto sets forth the revised Commitments of Transferor Lender and
the Commitments of Purchasing Lender as well as administrative information with
respect to Purchasing Lender.

10. This Assignment and Assumption Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.

[SIGNATURE PAGE FOLLOWS]

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

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective duly authorized officers
on the date set forth above.

 

[                                                                          ]

as Transferor Lender

By:  

 

Name: Title:

[                                                                          ]

as Purchasing Lender

By:  

 

Name: Title:

PNC BANK, NATIONAL ASSOCIATION

as Administrative Agent

By:  

 

Name: Title:

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SCHEDULE I TO COMMITMENT TRANSFER SUPPLEMENT

LIST OF OFFICES, ADDRESSES FOR NOTICES AND COMMITMENT AMOUNTS

 

     Revised Commitment Amount    $                Revised Commitment Percentage
               %    Commitment Amount    $                Commitment Percentage
               % Addresses for Notices for [             ]      

Attention:

Telephone:

Telecopier:

     

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

EXHIBIT 1.1(N)(1)

FORM OF REVOLVING CREDIT NOTE

 

$                                    , 20    

FOR VALUE RECEIVED, 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”), and BITE, INC., a corporation organized under the laws of the State
of Colorado (“Bite”, together with Crocs, Retail, Ocean and Jibbitz, the
“Borrowers” and each a “Borrower”), jointly and severally, hereby promise to pay
to the order of                     (“                     ”), at the office of
Administrative Agent (as defined below) at the address set forth in the Credit
Agreement (as defined below) or at such other place as Administrative Agent may
from time to time designate to any Borrower in writing: (i) on the Expiration
Date, or (ii) earlier as provided in the Credit Agreement, the lesser of the
principal sum of                     DOLLARS ($            ) or such lesser sum
which then represents                     Revolving Credit Commitment of the
aggregate unpaid principal amount of all Revolving Credit Loans made or extended
to Borrowers by                     pursuant to the Credit Agreement, in lawful
money of the United States of America in immediately available funds, together
with interest on the principal hereunder remaining unpaid from time to time, at
the rate or rates from time to time in effect under the Credit Agreement.

THIS REVOLVING CREDIT NOTE is executed and delivered under and pursuant to the
terms of that certain Amended and Restated Credit Agreement, dated as of the
date hereof (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among the Borrowers,
                    and the other financial institutions named therein or which
hereafter become a party thereto as lenders (the “Lenders”) and PNC Bank,
National Association, in its capacity as administrative agent for Lenders (in
such capacity, “Administrative Agent”) and in its capacity as a Lender.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings provided in the Credit Agreement.

Each Borrower hereby waives diligence, presentment, demand, protest and notice
of any kind whatsoever as further set forth in the Credit Agreement.

This Revolving Credit Note is one of the Notes referred to in the Credit
Agreement, which among other things, contains provisions for the acceleration of
the maturity hereof upon the happening of certain events, for optional and
mandatory prepayments of the principal hereof prior to the maturity hereof and
for the amendment or waiver of certain terms and conditions therein specified.

THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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

IN WITNESS WHEREOF, the undersigned have executed this Note the day and year
first written above intending to be legally bound hereby.

 

CROCS, INC. By:  

 

Name:  

 

Title:  

 

CROCS RETAIL, INC. By:  

 

Name:  

 

Title:  

 

OCEAN MINDED, INC. By:  

 

Name:  

 

Title:  

 

JIBBITZ, LLC By:  

 

Name:  

 

Title:  

 

BITE, INC. By:  

 

Name:  

 

Title:  

 

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EXHIBIT 1.1 (N)(2)

SWING LOAN NOTE

 

$                                    , 20    

FOR VALUE RECEIVED, 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”), and BITE, INC., a corporation organized under the laws of the State
of Colorado (“Bite”, together with Crocs, Retail, Ocean and Jibbitz, the
“Borrowers” and each a “Borrower”), jointly and severally, hereby promise to pay
to the order of             (“            ”), at the office of Administrative
Agent (as defined below) at the address set forth in the Credit Agreement (as
defined below) or at such other place as Administrative Agent may from time to
time designate to any Borrower in writing: (i) on the Expiration Date, or
(ii) earlier as provided in the Credit Agreement, the lesser of the principal
sum of             DOLLARS ($            ) or such lesser sum which then
represents the aggregate unpaid principal amount of all Swing Loans made or
extended to Borrowers by             pursuant to the Credit Agreement, in lawful
money of the United States of America in immediately available funds, together
with interest on the principal hereunder remaining unpaid from time to time, at
the rate or rates from time to time in effect under the Credit Agreement.

THIS SWING LOAN NOTE is executed and delivered under and pursuant to the terms
of that certain Amended and Restated Credit Agreement, dated as of the date
hereof (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), by and among the Borrowers, the
various financial institutions named therein or which hereafter become a party
thereto as lenders (the “Lenders”) and PNC Bank, National Association, in its
capacity as administrative agent for Lenders (in such capacity, “Administrative
Agent”) and in its capacity as a Lender. Capitalized terms used herein and not
otherwise defined herein shall have the meanings provided in the Credit
Agreement.

Each Borrower hereby waives diligence, presentment, demand, protest and notice
of any kind whatsoever as further set forth in the Credit Agreement.

This Swing Loan Note is one of the Notes referred to in the Credit Agreement,
which among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for optional and mandatory
prepayments of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain terms and conditions therein specified.

THIS SWING LOAN NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Note the day and year
first written above intending to be legally bound hereby.

 

CROCS, INC. By:  

 

Name:  

 

Title:  

 

CROCS RETAIL, INC. By:  

 

Name:  

 

Title:  

 

OCEAN MINDED, INC. By:  

 

Name:  

 

Title:  

 

JIBBITZ, LLC By:  

 

Name:  

 

Title:  

 

BITE, INC. By:  

 

Name:  

 

Title:  

 

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EXHIBIT 2.5.1

FORM OF

LOAN REQUEST

 

TO: PNC Bank, National Association, as Administrative Agent

   PNC Firstside Center

   500 First Avenue, 4th Floor

   Pittsburgh, PA 15219

   Telephone No.: (412) 768-0423

   Telecopier No.: 412) 762-8672

   Attn: Trina Barkley

 

FROM:                 , a Pennsylvania corporation, (each a “Borrower” and
collectively, the “Borrowers”).

 

RE: Credit Agreement (as it may be amended, restated, modified or supplemented,
the “Credit Agreement”), dated as of             , 2011, by and among the
Borrowers, the Guarantors party thereto, the Lenders party thereto and PNC Bank,
National Association, as administrative agent for the Lenders (the
“Administrative Agent”).

Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to them by the Credit Agreement.

 

A. Pursuant to Section 2.5.1 [Revolving Credit Loan Requests] of the Credit
Agreement, the undersigned Borrowers irrevocably request [check one line under
1.(a) below and fill in blank space next to the line as appropriate]:

 

  1(a)   

             

  A new Revolving Credit Loan, OR     

             

  Renewal of the LIBOR Rate Option applicable to an
outstanding                     Revolving Credit Loan originally made
on                     , 20    , OR     

             

  Conversion of the Base Rate Option applicable to an
outstanding                     Revolving Credit Loan originally made on
                    , 20     to a Loan to which the LIBOR Rate Option applies,
OR     

             

  Conversion of the LIBOR Rate Option applicable to an outstanding
                    Revolving Credit Loan originally made on
                    , 20     to a Loan to which the Base Rate Option applies.

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SUCH NEW, RENEWED OR CONVERTED LOAN SHALL BEAR INTEREST:

[Check one line under 1.(b) below and fill in blank spaces in line next to
line]:

 

  1(b)(i)   

             

   Under the Base Rate Option. Such Loan shall have a Borrowing Date of
                    , 20     (which date shall be the same Business Day of
receipt by the Administrative Agent by 1:00 p.m. eastern time of this Loan
Request for making a new Revolving Credit Loan to which the Base Rate Option
applies, or (ii) the last day of the preceding Interest Period if a Loan to
which the LIBOR Rate Option applies is being converted to a Loan to which the
Base Rate Option applies).         OR   (ii)   

             

   Under the LIBOR Rate Option. Such Loan shall have a Borrowing Date of
                    , 20     (which date shall be (i) three (3) Business Days
subsequent to the Business Day of receipt by the Administrative Agent by
1:00 p.m. eastern time of this Loan Request for making a new Revolving Credit
Loan to which the LIBOR Rate Option applies, renewing a Loan to which the LIBOR
Rate Option applies, or converting a Loan to which the Base Rate Option applies
to a Loan to which the LIBOR Rate Option applies).   2   

Such Loan is in the principal amount of U.S. $             or the principal
amount to be renewed or converted is U.S. $            

 

[for Revolving Credit Loans under Section 2.5.1 not to be less than $2,000,000
and in increments of $500,000 for each Borrowing Tranche under the LIBOR Rate
Option and not less than the lesser of $1,000,000 or the maximum amount
available for Borrowing Tranches under the Base Rate Option.]

  3   

[Complete blank below if the Borrowers are selecting the LIBOR Rate Option]:

 

Such Loan shall have an Interest Period of [one, two or three] Month(s):
            

 

B As of the date hereof and the date of making the above-requested Loan (and
after giving effect thereto): the Loan Parties have performed and complied with
all covenants and conditions of such Persons under the Credit Agreement and the
other Loan Documents; all of the representations and warranties contained in
Section 6 of the Credit Agreement and in the other Loan Documents are true and
correct in all material respects (unless any such representation or warranty is
qualified to materiality, in which case such representation or warranty is true
and correct in all respects), except for representations and warranties made as
of a specified date (which were true and correct in all material respects, as
applicable, as of such date); no Event of Default or Potential Default has
occurred and is continuing or exists; the making of such Loan shall not
contravene any Law applicable to the Borrowers, any other Loan Party, any
Subsidiary of the Borrowers or of any other Loan Party; the making of such Loan
shall not cause the Revolving Facility Usage to exceed the lesser of (i) the
Revolving Credit Commitments or (ii) the Borrowing Base.

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C Each of the undersigned hereby irrevocably requests [check one line below and
fill in blank spaces next to the line as appropriate]:

 

    1   

             

   Funds to be deposited into a PNC Bank bank account per our current standing
instructions. Complete amount of deposit if not full loan advance amount: U.S.
$            .     2   

             

  

Funds to be wired per the following wire instructions:

 

U.S. $             Amount of Wire Transfer

Bank Name:                                              

ABA:                                                         

Account Number:                                     

Account Name:                                         

Reference:                                                  

    3   

             

   Funds to be wired per the attached Funds Flow (multiple wire transfers).

[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE 1 OF 1 TO LOAN REQUEST]

The Borrowers certify to the Administrative Agent for the benefit of the Lenders
as to the accuracy of the foregoing on                     , 20    .

 

CROCS, INC. By:  

 

Name:  

 

Title:  

 

CROCS RETAIL, INC. By:  

 

Name:  

 

Title:  

 

OCEAN MINDED, INC. By:  

 

Name:  

 

Title:  

 

JIBBITZ, LLC By:  

 

Name:  

 

Title:  

 

BITE, INC. By:  

 

Name:  

 

Title:  

 

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EXHIBIT 2.4.2

SWING LOAN REQUEST

 

TO:   PNC Bank, National Association, as Administrative Agent
PNC Firstside Center

500 First Avenue, 4th Floor

Pittsburgh, PA 15219

Telephone No.: (412) 768-0423

Telecopier No.: 412) 762-8672

Attn: Trina Barkley

  FROM:   Crocs, Inc., a Delaware corporation, Crocs Retail, inc., a Colorado
corporation, Ocean Minded, Inc., a Colorado corporation, Jibbitz, LLC, a
Colorado limited liability company and Bite, Inc., a Colorado corporation (each
a “Borrower” and collectively, the “Borrowers”). RE:   Amended and Restated
Credit Agreement (as it may be amended, restated, modified or supplemented, the
“Credit Agreement”), dated as December             , 2011, by and among the
Borrowers, the Lenders party thereto and PNC Bank, National Association, as
administrative agent for the Lenders, (the “Administrative Agent”).

Capitalized terms not otherwise defined herein shall have the respective
meanings given to them by the Agreement.

Pursuant to Section 2.4.2 of the Agreement, the Borrowers hereby make the
following Swing Loan Request:

 

1.    Aggregate principal amount of such Swing Loan (may not be less than
$(1,000,000)    U.S. $                                         
                    2.   

Proposed Borrowing Date

(which date shall be on or after the date on

which the Administrative Agent receives this

Swing Loan Request, with such Swing Loan Request to be received no later than

1:00 p.m. eastern time on the Borrowing

Date)

  

                                                          

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3.    As of the date hereof and the date of making the above-requested Swing
Loan (and after giving effect thereto): the Loan Parties have performed and
complied with all covenants and conditions of such Persons under the Credit
Agreement and the other Loan Documents; all of the representations and
warranties contained in Section 6 of the Credit Agreement and in the other Loan
Documents are true and correct in all material respects (unless any such
representation or warranty is qualified to materiality, in which case such
representation or warranty is true and correct in all respects), except for
representations and warranties made as of a specified date (which were true and
correct in all material respects, as applicable, as of such date); no Event of
Default or Potential Default has occurred and is continuing or exists; the
making of such Loan shall not contravene any Law applicable to the Borrowers,
any other Loan Party, any Subsidiary of the Borrowers or of any other Loan
Party; the making of such Loan shall not exceed the Swing Loan Commitment or
cause the Revolving Facility Usage to exceed the lesser of (i) Revolving Credit
Commitments or (ii) the Borrowing Base. 4.    Each of the undersigned hereby
irrevocably requests [check one line below and fill in blank spaces next to the
line as appropriate]:

 

  

A

  

            

   Funds to be deposited into a PNC Bank bank account per our current standing
instructions. Complete amount of deposit if not full loan advance amount: U.S.
$                    .   

B

  

            

  

Funds to be wired per the following wire instructions:

 

U.S. $                     Amount of Wire Transfer

Bank Name:                                                  

ABA:                                                             

Account Number:                                       

Account Name:                                            

Reference:                                                     

  

C

  

            

  

Funds to be wired per the attached Funds Flow (multiple wire transfers).

[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE—SWING LOAN REQUEST]

The Borrower certifies to the Administrative Agent for the benefit of the
Lenders as to the accuracy of the foregoing on                     , 201    .

 

CROCS, INC. By:  

 

Name:  

 

Title:  

 

CROCS RETAIL, INC. By:  

 

Name:  

 

Title:  

 

OCEAN MINDED, INC. By:  

 

Name:  

 

Title:  

 

JIBBITZ, LLC By:  

 

Name:  

 

Title:  

 

BITE, INC. By:  

 

Name:  

 

Title:  

 

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EXHIBIT 5.9.7(A)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:  

 

  Name:   Title:

Date:                     , 20[    ]

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EXHIBIT 5.9.7(B)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code].

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:  

 

  Name:   Title:

Date:                     , 20[    ]

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EXHIBIT 5.9.7(C)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:  

 

  Name:   Title:

Date:                     , 20[    ]

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EXHIBIT 5.9.7(D)

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of [            ] (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among [            ], and each lender from time to time party
thereto.

Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:  

 

  Name:   Title:

Date:                     , 20[    ]

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EXHIBIT 8.3.3

COMPLIANCE CERTIFICATE

PNC Bank, National Association

2 North Lake Avenue, Suite 440

Pasadena, CA 91101

Attention: Steve Roberts

The undersigned, the [Chief Executive Officer / President / Chief Financial
Officer / Treasurer / Director of Treasury] of CROCS, INC., a Delaware
corporation (“Crocs”), delivers this certificate to PNC BANK, NATIONAL
ASSOCIATION (“Administrative Agent”), in accordance with the requirements of
Section 8.3.3 of that certain Amended and Restated Credit Agreement dated
December     , 2011 (as may be supplemented, restated, superseded, amended or
replaced from time to time, the “Credit Agreement”) among 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”), and 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, collectively the “Borrowers” and each
a “Borrower”), Administrative Agent and certain financial institutions party
thereto as lenders from time to time (the “Lenders”). Capitalized terms used in
this Compliance Certificate, unless otherwise defined herein, shall have the
meanings ascribed to them in the Credit Agreement.

1. Based upon my review of the consolidated balance sheets and statements of
income of Borrowers for the fiscal period ending                     , 201    ,
copies of which are attached hereto, I hereby certify, in my capacity as an
officer of Crocs and not in my individual capacity, that:

 

  (a) the Fixed Charge Coverage Ratio was              to 1.0 (minimum required
– 1.25 to 1.0);

 

  (b) Borrowers Leverage Ratio was              to 1.0 (maximum permitted – 3.00
to 1.00)

 

  (c) Borrower was in compliance with the requirements of Sections 8.2.1, 8.2.3,
8.2.4 and 8.2.5 of the Credit Agreement.

Attached as Schedule “A” are the details underlying such financial covenant
calculations.

 

2. No Potential Default exists on the date hereof, other than:
                     [if none, so state, if a Potential Default exists, state
steps being taken with respect to such Potential Default]; and

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3. No Event of Default exists on the date hereof, other than:
                     [if none, so state, if an Event of Default exists, state
steps being taken with respect to such Event of Default].

 

Very truly yours,

By:                                   , as                             
of Crocs