Exhibit 10.2
COMMITMENT LETTER
$200,000,000 Senior Secured Revolving Credit Facility
June 8, 2009
Quiksilver, Inc. and
Quiksilver Americas, Inc.
15202 Graham St.
Huntington Beach, CA 92649
Attention: Joseph Scirocco, Chief Financial Officer
Dear Mr. Scirocco:
     We are pleased to advise Quiksilver, Inc. (the “Parent”) and Quiksilver
Americas, Inc. of the agreement of (a) Bank of America, N.A. (“Bank”) and
General Electric Capital Corporation (“GECC”) to provide their separate
commitments for the financing of a senior secured revolving credit facility in
favor of Quiksilver Americas, Inc. and certain of its domestic subsidiaries
(collectively, the “Borrower”) in an aggregate principal amount equal to
$200,000,000 (the “Facility”) and (b) Banc of America Securities LLC (“BAS”), an
affiliate of Bank, and GE Capital Markets, Inc. (“GECM”; collectively, together
with BAS, the “Arrangers”), an affiliate of GECC, to seek to arrange for the
syndication of the Facility, all as contemplated in this letter and the Summary
of Principal Terms and Conditions (the “Term Sheet”) annexed to this letter as
EXHIBIT A (including, without limitation, a maturity date of three years from
the closing date of the Facility).
     Subject to the terms and conditions set forth in this letter, the Term
Sheet, and the fee letter, dated May 21, 2009, among the Borrower, Bank, BAS,
GECC and GECM (the “Fee Letter”), Bank’s several commitment under the Facility
shall be in an amount equal to $100,000,000 (the “Bank Commitment”) and GECC’s
several commitment under the Facility shall be in an amount equal to
$100,000,000 (the “GECC Commitment”).
     Bank will act as the sole and exclusive administrative agent for the
Facility and Bank and GECC will act as co-collateral agents for the Facility.
The Arrangers shall act as joint lead arrangers and joint bookrunners. Each of
BAS, Bank, GECC and GECM will have the rights and authority customarily given to
financial institutions in such roles, but shall have no duties other than those
expressly set forth herein. No additional agents, co-agents or arrangers will be
appointed with respect to the syndication of the Facility except with the
consent of BAS and Bank.
     BAS intends to commence syndication efforts promptly. The Borrower will
actively assist BAS in achieving a Successful Syndication (as defined in the Fee
Letter), until such obligation to assist expires pursuant to the terms of the
Fee Letter. Such assistance shall include, among other things, (a) making the
Borrower’s senior officers, representatives, and advisors available from time to
time to attend and make presentations regarding the business of the Borrower at
one or more meetings of prospective lenders; (b) providing, and causing its
advisors to provide, BAS, Bank, GECC and GECM and other prospective lenders with
all such customary financial and other customary information with respect to the
Borrower and the transactions contemplated by this letter, including but not
limited to customary financial projections and forecasts relating to the
foregoing which BAS, Bank, GECC, GECM or any such lender reasonably may request
from time to time; and (c) assisting in the preparation of customary marketing
materials to be used in connection with the syndication of the Facility.

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     BAS and Bank will, in consultation with the Borrower, manage and control
all aspects of the syndication, including decisions as to the selection of
proposed additional lenders (which lenders shall be reasonably acceptable to the
Borrower, not to be unreasonably withheld) and any titles offered to proposed
additional lenders, when commitments will be accepted and the final allocations
of the commitments amongst the lenders. It is understood that no lender
participating in the Facility will receive compensation from the Borrower in
order to obtain its commitment, except on the terms contained herein, in the
Term Sheet, and in the Fee Letter.
     To ensure an orderly and effective syndication of the Facility, the
Borrower agrees that, from the date hereof until the earlier of (i) the Closing
Date or (ii) the occurrence of a Successful Syndication of the Facility (as
described above), the Borrower will not, and will not permit any of its
subsidiaries to, syndicate or issue, attempt to syndicate or issue, announce or
authorize the announcement of the syndication or issuance of any debt facility
within the United States, other than in connection with the Term Loan (as
defined in the Term Sheet), without the prior written consent of Bank, BAS, GECC
and GECM.
     The Borrower represents and warrants that (i) all written information
concerning or affecting Quiksilver, Inc. or any of its subsidiaries (other than
the projections described in clause (ii) below, forward-looking information and
information of a general economic or general industry nature) that has been or
will hereafter be made available to the Bank, BAS, GECC, GECM or any other
lender or any potential lender by the Borrower or any of its representatives in
connection with the transactions contemplated hereby is or will be when
furnished, taken as a whole, complete and correct in all material respects and
does not and will not, taken as a whole, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which such statements are or were made (after giving effect
to all supplements and updates thereto), and (ii) all financial projections that
have been or will be prepared by the Borrower and made available to Bank, BAS,
GECC, GECM or any other lender or any potential lender have been or will be
prepared in good faith based upon assumptions believed by the Borrower to be
reasonable at the time of preparation thereof, provided that Borrower shall
update such projections if any of such underlying assumptions are believed by
the Borrower to have changed in any material respect; it being acknowledged that
such projections are not to be viewed as facts and the actual results during the
period or periods covered by any such projections may differ significantly from
the projected results, and no assurance can be given that the projected results
will be realized. The Borrower agrees to supplement the information and
projections from time to time until the definitive loan documents become
effective so that the representations and warranties contained in this paragraph
remain correct as of the Closing Date. In providing this letter and arranging
for the syndication of the Facility, Bank, BAS, GECC and GECM are relying on the
accuracy of the information furnished to them by or on behalf of the Borrower
and its subsidiaries without independent verification thereof, it being
understood that projections by their nature are inherently uncertain and no
assurance is being given that the projected results will be realized.
     The Borrower hereby acknowledges that (a) Bank and BAS will make any
information and projections furnished by the Borrower (collectively, the
“Company Materials”) available to the proposed syndicate of lenders by posting
the Company Materials on IntraLinks or another similar electronic system (the
“Platform”) and (b) certain of the proposed lenders may be “public-side” lenders
(i.e., Lenders that do not wish to receive material non-public information with
respect to the Borrower or its securities (each, a “Public Lender”)). The
Borrower hereby agrees that (a) if requested by BAS or Bank, the Borrower will
identify that portion of the Company Materials that may be distributed to the
Public Lenders and include a reasonably detailed term sheet with such Company
Materials and that all Company Materials that are to be made available to Public
Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the

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first page thereof; (b) by marking Company Materials “PUBLIC” the Borrower shall
be deemed to have authorized the Bank, BAS, and the proposed lenders to treat
such Company Materials as not containing any material non-public information
with respect to the Borrower or its securities for purposes of United States
federal and state securities laws, it being understood that certain of such
Company Materials may be subject to confidentiality requirements; (c) all
Company Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Investor”; and (d) Bank and BAS shall
treat any Company Materials that are not marked “PUBLIC” as being suitable only
for posting on a portion of the Platform designated “Private Investor”.
     Borrower hereby acknowledges and agrees that each of the Arrangers may
provide to industry trade organizations information with respect to the Facility
that is necessary and customary for inclusion in league table measurements.
     The Borrower shall reimburse each of Bank, BAS, GECC and GECM from time to
time promptly following written demand for reasonable and documented
out-of-pocket expenses (including, but not limited to, reasonable and documented
out-of-pocket due diligence and syndication expenses, including reimbursement of
all expenses for field exam, reasonable travel expenses and reasonable and
documented fees, disbursements and charges of its counsel (limited to not more
than one primary counsel and necessary local counsel (limited to one local
counsel per jurisdiction) for each of Bank and BAS, on the one hand, and GECC
and GECM, on the other hand ), in each instance incurred in connection with the
preparation of this letter, the Term Sheet, the Fee Letter and the definitive
documentation for the Facility, whether or not the transactions contemplated by
this letter are closed; provided that the Borrower’s liability for GECC’s and
GECM’s legal fees and expenses for the initial closing of the Facility shall not
exceed $100,000. The Borrower shall pay to the Bank and BAS a deposit in the
amount of $100,000 to be applied to such expenses of Bank and BAS. In addition,
the Borrower agrees to deliver the Bank and BAS from time to time such
additional deposits as may be necessary to cover such expenses in excess of such
deposit (collectively, the “Deposit”). If the Facility is consummated, then the
Deposit, less all such reimbursable expenses, will be applied to closing fees
and expenses, and any balance returned to the Borrower. If for any reason, the
Facility is not consummated the balance, if any, of the Deposit remaining after
payment in full of all reimbursable expenses shall be returned to the Borrower.
     The Borrower agrees to indemnify and hold harmless Bank, BAS, GECC, GECM,
each other lender and each of their respective affiliates and their respective
officers, directors, employees, agents, attorneys, advisors and other
representatives (each, an “Indemnified Party”) from and against (and will
reimburse each Indemnified Party as the same are incurred for) any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, the reasonable fees, disbursements and other charges of counsel)
that may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) (a) any matters
contemplated by this letter or any related transaction or (b) the Facility and
any other financings, or any use made or proposed to be made with the proceeds
thereof, except to the extent such claim, damage, loss, liability or expense is
found in a final, nonappealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party’s gross negligence or willful
misconduct. In the case of an investigation, litigation or proceeding to which
the indemnity in this paragraph applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, the Borrower’s equityholders or creditors or an Indemnified Party,
whether or not an Indemnified Party is otherwise a party thereto and whether or
not the transactions contemplated hereby are consummated. The Borrower also
agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Borrower, or the Borrower’s
subsidiaries or affiliates or to the Borrower’s or their respective equity
holders or creditors arising out of, related to or in connection with any aspect
of the transactions contemplated hereby, except to the extent of direct, as

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opposed to special, indirect, consequential or punitive, damages determined in a
final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.
Notwithstanding any other provision of this letter, no Indemnified Party shall
be liable for any damages arising from the use by others of information or other
materials obtained through electronic telecommunications or other information
transmission systems, other than for direct or actual damages resulting from the
gross negligence or willful misconduct of such Indemnified Party as determined
by a final and nonappealable judgment of a court of competent jurisdiction.
     Except as required under applicable law or compulsory legal process, the
Parent and the Borrower shall maintain as confidential the terms or conditions
of this letter, the Term Sheet and the Fee Letter, and the terms, conditions,
provisions, and documentation of the Facility; provided, however, it is
understood and agreed that the Parent and the Borrower may disclose the
existence of this letter (including the Term Sheet) and the Fee Letter after
your acceptance of this letter and the Fee Letter, in filings with the
Securities and Exchange Commission and other applicable regulatory authorities
and stock exchanges. Without limiting the foregoing, (i) this letter, the Term
Sheet and the Fee Letter may not be disclosed in whole or in part to any person
or entity other than the Parent’s and the Borrower’s respective directors,
employees, accountants, attorneys and professional advisors in connection with
the establishment of the Facility on a confidential basis, without Bank’s and
GECC’s prior written consent, and (ii) the Term Sheet and draft documentation
for the Facility may be disclosed on a confidential basis to the lenders and
agent in respect of the Term Loan.
     All of the Borrower’s reimbursement, indemnification and confidentiality
obligations set forth in this letter, the Term Sheet and the Fee Letter shall
remain in full force and effect regardless of whether any definitive
documentation for the establishment of the Facility shall be executed and
notwithstanding the termination of this letter or any undertaking hereunder,
provided that the reimbursement and indemnification provisions shall be
superseded in each case by the applicable provisions contained in the definitive
documentation upon execution thereof and thereafter shall have no further force
and effect.
     The Parent and the Borrower each acknowledges that Bank, BAS, GECC, GECM or
their respective affiliates may be providing financing or other services to
parties whose interests may conflict with the Parent’s or the Borrower’s. Bank,
BAS, GECC and GECM will not furnish confidential information regarding the
Parent and its direct and indirect subsidiaries obtained from the Parent of the
Borrower to any of their other respective customers or any other person (other
than their respective affiliates, attorneys, advisors, appraisers, commercial
finance auditors, regulatory authorities and other persons involved in the
transactions contemplated hereby) and will treat confidential information
relating to the Parent and its affiliates with the same degree of care as they
treat their own confidential information. Bank, BAS, GECC and GECM further
advise the Parent and the Borrower that they will not make available to the
Parent or the Borrower confidential information that they have obtained or may
obtain from any other customer. In connection with the services and transactions
contemplated hereby, the Parent and the Borrower each agrees that Bank, BAS,
GECC and GECM are permitted to access, use and share with any of their
respective bank or non-bank affiliates, agents, advisors (legal or otherwise) or
representatives, any information concerning the Parent or any of its direct and
indirect subsidiaries that is or may come into the possession of Bank, BAS, GECC
or GECM or any of such affiliates.
     In connection with all aspects of each transaction contemplated by this
letter, the Borrower acknowledges and agrees that: (i) the Facility and any
related arranging or other services described in this letter is an arm’s-length
commercial transaction between the Borrower and its affiliates, on the one hand,
and Bank, BAS, GECC and GECM, on the other hand, as the case may be, and the
Borrower is capable of evaluating and understanding and understands and accept
the terms, risks and conditions of the transactions contemplated by this letter;
(ii) in connection with the transaction contemplated hereby and the process
leading to such transaction, each of Bank, BAS, GECC and GECM is and has been
acting

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solely as a principal and, except as expressly set forth in this letter, is not
acting as an agent or fiduciary, for the Borrower or any of its affiliates,
stockholders, creditors or employees or any other party; (iii) neither Bank,
BAS, GECC nor GECM has assumed or will assume an advisory, agency or fiduciary
responsibility in the Borrower’s or its affiliates’ favor with respect to any of
the transactions contemplated hereby or the process leading thereto
(irrespective of whether Bank, BAS, GECC or GECM has advised or is currently
advising the Borrower or its affiliates on other matters) and neither Bank, BAS,
GECC nor GECM has any obligation to Borrower or its affiliates with respect to
the transactions contemplated hereby except those obligations expressly set
forth in this letter and as may be set forth in definitive documentation for the
Facility; (iv) each of Bank, BAS, GECC and GECM and their respective affiliates
may be engaged in a broad range of transactions that involve interests that
differ from the Borrower and its affiliates and Bank, BAS, GECC and GECM have no
obligation to disclose any of such interests by virtue of any fiduciary, agency
or advisory relationship; and (v) Bank, BAS, GECC and GECM have not provided any
legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby and the Borrower has consulted its own legal,
accounting, regulatory and tax advisors to the extent the Borrower has deemed
appropriate. The Borrower hereby waives and releases, to the fullest extent
permitted by law, any claims that it may have against Bank, BAS, GECC or GECM
with respect to any breach or alleged breach of agency or fiduciary duty with
respect to the transactions contemplated hereby.
     The identity of the Borrower is of material importance to Bank, BAS, GECC
and GECM. Consequently, this letter may not be assigned or transferred by the
Borrower without the prior written consent of Bank, BAS, GECC and GECM, and any
attempted assignment without such consent shall be void. This letter and the
Term Sheet may not be amended or any provision hereof waived or modified except
by an instrument in writing signed by the Borrower, Bank, BAS, GECC and GECM.
This letter is intended to be solely for the benefit of the parties hereto and
is not intended to confer any benefits upon, or create any rights in favor of,
any person other than the parties hereto and the Indemnified Persons.
     Each of Bank, BAS, GECC and GECM reserves the right to employ the services
of its affiliates in providing services contemplated by this letter and to
allocate, in whole or in part, to its affiliates certain fees payable to it in
such manner as it and its affiliates may agree in their sole discretion.
     All amounts payable by Borrower under this letter or the Fee Letter will be
made in U.S. dollars and, in any case, shall not be subject to counterclaim or
set-off for, or be otherwise affected by, any claim or dispute relating to any
other matter. In addition, all such payments shall be made without deduction for
any taxes, levies, imposts, duties, deductions, charges or withholdings imposed
by any national, state or other taxing authority, or will be grossed up by
Borrower for such amounts.
     This letter, the Term Sheet and the Fee Letter sets forth the entire
agreement between the parties with respect to the matters addressed herein and
supersedes all prior communications, written or oral, with respect hereto. This
letter may be executed in any number of counterparts, each of which, when so
executed, shall be deemed to be an original and all of which, taken together,
shall constitute one and the same letter. Delivery of an executed counterpart of
a signature page to this letter by electronic transmission shall be as effective
as delivery of an original executed counterpart of this letter.
     This letter shall terminate unless accepted by the Parent and the Borrower
on or before 5:00 p.m. (Eastern time) on June 8, 2009 by signing below and
returning this letter and the Fee Letter, so signed to Bank.
     If this letter is so accepted, then, subject to the terms and conditions of
this letter, Bank, BAS, GECC and GECM would be obligated to enter into the
Facility if all conditions precedent thereto are satisfied (as reasonably
determined by Bank, BAS, GECC and GECM) on or before June 26, 2009.

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     This letter does not constitute an unconditional commitment to lend. Such a
commitment will exist only upon satisfaction of the following: (i) the execution
and delivery of definitive loan documents (each in form consistent with this
letter and the Term Sheet and otherwise reasonably satisfactory to the Borrower,
Bank, BAS, GECC and GECM) on or before June 26, 2009; and (ii) the satisfaction
of all conditions precedent described herein or in the Term Sheet on or before
June 26, 2009.
     THIS LETTER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. Each of
the Borrower, Bank, BAS, GECC and GECM hereby irrevocably and unconditionally
submits to the exclusive jurisdiction of any state or Federal court sitting in
the Borough of Manhattan over any suit, action or proceeding arising out of or
relating to the transactions contemplated hereby, this letter, the Term Sheet,
the Fee Letter or the performance of services hereunder or thereunder. The
Borrower agrees that service of any process, summons, notice or document by
registered mail addressed to the Borrower shall be effective service of process
for any suit, action or proceeding brought in any such court. Each of the
Borrower, Bank, BAS, GECC and GECM hereby irrevocably and unconditionally waives
any objection to the laying of venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
has been brought in any inconvenient forum. EACH OF THE BORROWER, BANK, BAS,
GECC AND GECM WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING AMONGST OR BETWEEN THE BORROWER AND/OR BANK, BAS, GECC, GECM OR ANY
OTHER LENDER.
     Bank, BAS, GECC and GECM hereby notify the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “Patriot Act”)), each of Bank, BAS, GECC and GECM and
each of the other lenders may be required to obtain, verify and record
information that identifies the Borrower, which information may include the
Borrower’s name and address and other information that will allow each of Bank,
BAS, GECC and GECM and the other lenders to identify the Borrower in accordance
with the Patriot Act. This notice is given in accordance with the requirements
of the Patriot Act and is effective for each of Bank, BAS, GECC and GECM and the
other lenders.
     This Commitment Letter amends and restates in its entirety the Commitment
Letter dated May 21, 2009 among Bank, BAS, GECC, GECM, the Parent and the
Borrower.
     From and after the date hereof, all references to the Commitment Letter in
the Fee Letter or any other agreement shall be deemed to be references to this
Commitment Letter.
     If the foregoing is in accordance with your understanding of our agreement,
please sign this letter in the space indicated below and return it to Bank.
[Remainder of page intentionally left blank]

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     We look forward to working with you on this transaction and continuing our
mutually beneficial relationship with you.

                  BANK OF AMERICA, N.A.    
 
           
 
  By        
 
           
 
  Name:        
 
  Title:        
 
                BANC OF AMERICA SECURITIES LLC    
 
           
 
  By        
 
           
 
  Name:        
 
  Title:        
 
                GENERAL ELECTRIC CAPITAL CORPORATION    
 
           
 
  By        
 
           
 
  Name:        
 
  Title:        
 
                GE CAPITAL MARKETS, INC.    
 
           
 
  By        
 
           
 
  Name:        
 
  Title:        

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The foregoing is agreed to as of
the date first above written:

          QUIKSILVER, INC.    
 
       
By
       
 
       
Name:
       
Title:
       
 
        QUIKSILVER AMERICAS, INC.    
 
       
By
       
 
       
Name:
       
Title:
       

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EXHIBIT A
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS
$200,000,000 Senior Secured Revolving Credit Facility
 
June 8, 2009

     
Borrower:
  Quiksilver Americas, Inc. and all domestic subsidiaries which own any assets
of the type included in the Borrowing Base (as defined below) (collectively, the
“Borrower”).
 
   
Guarantors:
  Quiksilver, Inc. and all other direct domestic subsidiaries of the Borrower
that are not Borrowers (other than immaterial subsidiaries to be mutually agreed
upon by the Borrower, the Administrative Agent and the Co-Collateral Agents). In
addition, each Borrower shall cross guaranty all other Borrowers.
 
   
Administrative Agent:
  Bank of America, N.A. will act as sole and exclusive administrative agent for
the Lenders (in such capacity, the “Administrative Agent”).
 
   
Joint Lead Arrangers and Joint Bookrunners:
  Banc of America Securities LLC (“BAS”) and GE Capital Markets, Inc. (“GECM”;
collectively, together with BAS, the “Arrangers”).
 
   
Co-Collateral Agents:
  Bank of America, N.A. and General Electric Capital Corporation (“GECC”;
collectively, in such capacity, the “Co-Collateral Agents”).
 
   
Lenders:
  Bank of America, N.A., GECC and a syndicate of financial institutions arranged
by the Arrangers, which lenders shall be reasonably acceptable to the Borrower,
such acceptance not to be unreasonably withheld.
 
   
Purpose:
  The Facility, in conjunction with the initial proceeds of the Term Loan
(defined below), in an initial principal amount equal to $125,000,000, will be
used to refinance all of the obligations under that certain Amended and Restated
Credit Agreement dated as of June 3, 2005 among the Quiksilver, Inc., Quiksilver
Americas, Inc., JPMorgan Chase Bank, N.A. and the other parties thereto, to
repay certain other indebtedness of Quiksilver, Inc. and its subsidiaries, to
pay related transaction fees and expenses in connection with the

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  refinancing and repayment of indebtedness and for working capital and general
corporate purposes of the Borrower.
 
   
Facility:
  A senior secured revolving credit facility in an aggregate principal amount of
$200,000,000 (the “Facility”). The Facility shall include a sublimit of
$100,000,000 for the issuance of letters of credit and a swing line loan
sublimit of 10% of the aggregate commitments under the Facility.1
 
   
Increase Option:
  Provided that no default or event of default is then existing or would arise
therefrom, the Administrative Agent and each of the Lenders agree that the
Borrower, at its option, may request, not more than on two (2) occasions and in
minimum increments of $25,000,000, that the Facility be increased by an
aggregate principal amount not to exceed $50,000,000. Any such increase shall be
on the same terms and conditions as the Facility. Any or all of the existing
Lenders shall initially have the right of first refusal (but not the obligation)
to increase their respective commitments to satisfy the Borrower’s requested
increase in the Facility. If the Lenders are unwilling to so increase their
commitments, BAS will use its reasonable efforts to obtain one or more financial
institutions which are not then Lenders reasonably acceptable to the Borrower to
become party to the Facility and to provide a commitment in an amount necessary
to satisfy the Borrower’s requested increase in the Facility. The Borrower shall
pay BAS, the Administrative Agent and the participating Lenders fees and other
compensation as agreed to between the Borrower, BAS, the Administrative Agent or
such Lenders, as applicable, in connection with the exercise of the Increase
Option.
 
   
Borrowing Base:
  Credit Extensions under the Facility shall not exceed the lesser of
$200,000,000 or the Borrowing Base. The Borrowing Base at any time will be the
sum of (a) 85% of the value of eligible credit card receivables of the Borrower,
plus (b) 85% of the face amount of the Borrowers’ eligible accounts receivable
(other than credit card receivables), plus (c) 85% of the net orderly
liquidation value of eligible inventory of the Borrower minus (d) customary
reserves established in connection with a good faith determination made in the
commercially reasonable credit judgment of the Administrative Agent and the
Co-Collateral Agent. Definitions of appraised value, eligible inventory,
eligible credit card receivables, eligible accounts receivable, and

 

1    Facility may include a Canadian subfacility on terms reasonably acceptable
to Lenders.

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  reserve levels and categories will be mutually established by the Borrower,
the Administrative Agent and the Co-Collateral Agents upon completion of an
inventory appraisal and commercial finance examination; provided that those
accounts outstanding for 90 days or less from the invoice date (or 120 days or
less up to an amount not to exceed [$TBD]) and those accounts not yet overdue by
60 days or less shall be included in eligible accounts receivable, to the extent
such accounts satisfy all other eligibility criteria. Without limiting the
generality of the foregoing, the definitive documentation shall reflect that
each Co-Collateral Agent shall have rights at least as expansive as the rights
afforded to the Administrative Agent, any Arranger or any other agent or
arranger in the Facility relating to (i) (x) the definition of Availability,
Excess Availability, and any component definition of any of the foregoing,
(y) the definition of Borrowing Base and any component thereof (including,
without limitation, reserves, advance rates, eligibility criteria, reporting
requirements and appraisals, examinations and collateral audits) and (ii) the
validity, extent, perfection or priority of the liens granted to the
Administrative Agent or the Co-Collateral Agents in regards to the Collateral
(collectively, “Collateral Issues”), and any provision relating to a Collateral
Issue which would otherwise only need to be satisfactory (or, as the case may
be, reasonably satisfactory, etc.) to the Administrative Agent or any other
agent or arranger shall be deemed to require the consent of or be satisfactory
(or, as the case may be, reasonably satisfactory, etc.) to the Co-Collateral
Agents. In addition, in the event that the agents under the Facility cannot
agree on issues relating to the Borrowing Base, Availability, Excess
Availability, Borrowing Base eligibility standards, reserves, advance rates,
borrowing base reporting, appraisals or examinations or any other action or
determination, the determination shall be made by the agent either asserting the
more conservative credit judgment (that is, that would result in the least
amount of credit being available to the Borrower) or declining to permit the
requested action.
 
   
Closing Date:
  A mutually agreed upon date to be determined but in any event on or before
June 26, 2009.
 
   
Maturity Date:
  Three years from the Closing Date.
 
   
Applicable Margin:
  The Applicable Margin shall be the applicable rate per annum set forth in the
pricing grid, below, based upon average daily Excess Availability (the lesser of
the Borrowing Base and the amount of the aggregate commitments under the
Facility less

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  outstanding credit extensions) for the immediately preceding fiscal quarter.
Initial pricing shall be at Level II and shall remain at Level II for 2 full
fiscal quarters after the Closing Date (notwithstanding that the performance
measures for Level I may be satisfied; provided that, if the performance
measures set forth below for Level III are in effect, pricing shall be at Level
III during such period that such performance measures are in effect). The
applicable rates shall thereafter be adjusted quarterly in accordance with the
pricing grid.

                              LIBOR   Base Rate Level   Excess Availability  
Loans   Loans I  
Equal to or greater than 66% of the lesser of the Borrowing Base and the amount
of the aggregate commitments under the Facility
    4.00 %     3.00 % II  
Less than 66% but equal to or greater than 33% of the lesser of the Borrowing
Base and the amount of the aggregate commitments under the Facility
    4.25 %     3.25 % III  
Less than 33% of the lesser of the Borrowing Base and the amount of the
aggregate commitments under the Facility
    4.50 %     3.50 %

     
Letter of Credit Issuer:
  Bank of America, N.A., any other Lender requested by the Borrower and
acceptable to the Administrative Agent, or any of their respective affiliates.
 
   
Letter of Credit Fees:
  (a) Documentary Letters of Credit shall bear a fee equal to the applicable
LIBOR Rate Margin payable quarterly in arrears on the average daily balance of
Documentary Letters of Credit outstanding; (b) Standby Letters of Credit shall
be priced at a fee equal to the applicable LIBOR Rate Margin, payable on the
total face amount of each outstanding standby letter of credit, payable
quarterly in arrears; (c) a fronting fee shall be payable to the Letter of
Credit Issuer in an amount

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  equal to 0.125% per annum for all Letters of Credit quarterly in arrears; and
(d) Letter of Credit Issuer’s customary fees and charges in connection with the
issuance, negotiation, amendment, and extension of letters of credit shall be
payable by the Borrower to the Letter of Credit Issuer. All Letter of Credit
fees shall be calculated on the basis of actual number of days elapsed in a year
of 360 days.
 
   
Default Pricing:
  Each level of the Applicable Margin and Letter of Credit Fees shall be
increased by 2% per annum.
 
   
Borrowing Options:
  At the option of the Borrower, borrowings under the Facility shall be at a
rate of interest of either (a) the Base Rate plus the Applicable Margin (“Base
Rate Loan”), or (b) the LIBOR Rate plus the Applicable Margin (“LIBOR Rate
Loan”). LIBOR Rates will be quoted for one, two, three, and six months, but
there shall be a 2.0% floor on LIBOR for one-month and two-month LIBOR Rate
Loans; provided that Borrower shall be permitted to borrow for one-month or
two-month periods at the three-month LIBOR rate. Base Rate Loans shall be
available on at least one business day’s prior notice. LIBOR Rate Loans shall
require at least three business days’ advance notice. Interest on Base Rate
Loans will be due and payable quarterly in arrears. Interest on LIBOR Rate Loans
will be payable at the end of each applicable interest period or quarterly in
arrears, whichever is earlier. All interest for LIBOR Rate Loans shall be based
on a 360-day year and actual days elapsed and all interest on Base Rate Loans
shall be based on a 365/366 day year and actual days elapsed. “Base Rate” means
the greatest of (1) the Prime Rate announced by the Bank as its “Prime Rate”,
(2) the Federal Funds Effective Rate plus 0.50% per annum, or (3) the LIBOR Rate
for an interest period of one month plus 1% per annum.
 
   
Swing Line Option:
  Swing line loans (“Swing Line Loans” ) will be made available by the
Administrative Agent on a same day basis in an aggregate amount not to exceed
10% of the aggregate commitments under the Facility. All Swing Line Loans shall
bear interest at the Base Rate plus the Applicable Margin.
 
   
Unused Line Fee:
  The Borrower will pay an unused line fee calculated from the Closing Date of
(i) 1.00% per annum on the average daily unused portion of the Facility if less
than 33% of the Facility has been used, (ii) 0.75% per annum on the average
daily unused portion of the Facility if 33% or more but less than 66% of the
Facility has been used and (iii) 0.50% per annum

5

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  on the average daily unused portion of the Facility if 66% or more than 66% of
the Facility has been used and, in each case, payable quarterly in arrears and
upon the Maturity Date, and adjusted quarterly. Swing Line Loans will, for
purposes of the commitment fee calculations only, not be deemed to be a
utilization of the Facility.
 
   
Optional Prepayments and Commitment Reductions:
  The Borrower may repay the loans at any time and from time to time without
premium or penalty (other than breakage costs with respect to LIBOR loans, if
applicable), in minimum principal amounts and with customary notice requirements
to be mutually agreed upon by the Borrower, the Administrative Agent and the
Co-Collateral Agents.
 
   
 
  The Borrower may reduce the unutilized portion of the commitments in respect
of the Facility at any time and from time to time, without premium or penalty,
in minimum principal amounts to be mutually agreed upon by the Borrower, the
Administrative Agent and the Co-Collateral Agents and subject to customary
notice requirements to be mutually agreed upon by the Borrower, the
Administrative Agent and the Co-Collateral Agents.
 
   
Mandatory Prepayments:
  If at any time the sum of borrowings under the Facility exceeds the lesser of
(i) the Borrowing Base as in effect at such time and (ii) the amount of the
aggregate commitments under the Facility as in effect at such time, prepayments
of loans (and/or the cash collateralization of Letters of Credit) shall be
required in an amount equal to such excess.
 
   
Additional Fees:
  Payable in the amounts and at the times set forth in the Fee Letter of even
dated herewith.
 
   
Security:
  The Facility (and all cash management services and other bank products
provided to any of the Borrower or Guarantors by any of the Lenders or their
affiliates) will be secured by a first priority (subject to exceptions to be
mutually agreed upon by the Borrower, the Administrative Agent and the
Co-Collateral Agents) perfected security position on all inventory and accounts
of the Borrower and Guarantors, together with all general intangibles (exclusive
of intellectual property subject to a first priority lien to secure the Term
Loan) relating to inventory and accounts, all contract rights under agreements
relating to inventory and accounts, all documents relating to inventory, all
supporting obligations and letter-of-credit rights relating to inventory and
accounts, all instruments evidencing payment for inventory and accounts;

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  all money, cash, cash equivalents, securities and other property of any kind
held directly or indirectly by the Co-Collateral Agents or any Lender; all
deposit accounts, credits, and balances with any financial institution with
which the Borrower maintains deposits and which contain proceeds of or
collections on, inventory and accounts; all books, records and other property
related to or referring to any of the foregoing, including books, records,
account ledgers, data processing records, computer software and other property
and all proceeds of any of the foregoing, including, but not limited to,
proceeds of any insurance policies, claims against third parties, subject to
exceptions and liens to be mutually agreed upon by the Borrower, the
Administrative Agent and the Co-Collateral Agents.
 
   
 
  The Facility will also be secured by (a) a second priority perfected security
position on substantially all other personal property of the Borrower and the
Guarantors, subject to exceptions and liens to be mutually agreed upon by the
Borrower, the Administrative Agent and the Co-Collateral Agents and (b) a second
priority pledge of the direct and indirect ownership interest in each direct
domestic subsidiary (and each Canadian foreign subsidiary, to secure obligations
under the contemplated Canadian sub-facility, if any) of the Borrower and each
Guarantor. The Co-Collateral Agents shall enter into an intercreditor agreement
with the agent for holders of a first priority lien on such other assets which
intercreditor agreement shall be on terms and conditions reasonably satisfactory
to the Co-Collateral Agents and which shall in any event provide that the
Co-Collateral Agents shall have the right to utilize, at no cost or expense,
such properties of the Borrower and Guarantors (including without limitation
intellectual property) to the extent necessary to sell, lease or otherwise
dispose of the inventory and accounts after an event of default (collectively,
the “Collateral”).
 
   
 
  Notwithstanding the foregoing, but subject to Sections 9-406 through 9-408 of
the Uniform Commercial Code, the security arrangements shall not include
Collateral to the extent (i) prohibited by applicable law, (ii) constituting
leaseholds, (iii) constituting vehicles and other assets subject to certificate
of title, (iv) constituting interests in joint ventures and non-wholly owned
subsidiaries which cannot be pledged without the consent of one or more third
parties, (v) those assets over which the granting of a security interest is such
assets would be prohibited by contract or (vi) otherwise mutually agreed upon by
the Borrower, the Administrative Agent and the Co-

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  Collateral Agents.
 
   
Cash Management:
  If, at any time, (a) Excess Availability is less than (i) 20.0% of the lesser
of the Borrowing Base and the amount of the aggregate commitments under the
Facility for 3 consecutive Business Days, or (ii) $30,000,000 for 3 consecutive
Business Days, (b) an Event of Default exists, or (c) the failure to either
(i) refinance the indebtedness owing by Pilot SAS (a wholly-owned indirect
subsidiary of Quiksilver, Inc.) to Crédit Lyonnais SA, BNP Paribas SA and
Société Générale SA pursuant to that certain unsecured credit agreement dated as
of March 14, 2008 (the “Pilot SAS Indebtedness”) or (ii) enter into a binding
commitment satisfactory to the Administrative Agent and the Co-Collateral Agents
to refinance the Pilot SAS Indebtedness (such refinancing to close by no later
than the maturity date thereof then in effect), in each case by no later than
that date which is fifteen (15) days prior to the maturity date of the Pilot SAS
Indebtedness then in effect (each, a “Cash Dominion Event”), all cash receipts
(subject to exceptions to be mutually agreed upon by the Borrower, the
Administrative Agent and the Co-Collateral Agents) shall be forwarded to a
deposit account which is subject to a control agreement in favor of the
Co-Collateral Agents or to a concentration account maintained by the
Co-Collateral Agents with Bank of America, N.A. and such receipts shall be
applied daily in reduction of the obligations under the Facility. The occurrence
of a Cash Dominion Event shall be deemed continuing at any time (x) when an
Event of Default is continuing or, (y) if such Cash Dominion Event has occurred
due to the failure by the Borrower to maintain Excess Availability as set forth
in clause (a) above, notwithstanding that Excess Availability may thereafter
exceed the amount set forth in clause (a) above, unless and until Excess
Availability exceeds such amounts for 60 consecutive days, in which case a Cash
Dominion Event shall no longer be deemed to be continuing; provided that a Cash
Dominion Event shall be deemed continuing (even if Excess Availability exceeds
the required amounts for 60 consecutive days) if a Cash Dominion Event has
occurred and been discontinued on 3 occasions during the term of the Facility
and (z) if such Cash Dominion Event has occurred due to events described in
clause (c) above, until such time as the Pilot SAS Indebtedness has been
refinanced, or a satisfactory binding commitment to refinance the Pilot SAS
Indebtedness (such refinancing to close by no later than the maturity date
thereof then in effect) has been entered into.

8

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  The definitive documentation for the Facility shall provide that, so long as
any advances or letters of credit are outstanding under the Facility, Borrower
shall not permit cash in an aggregate amount in excess of 10% of the Borrowing
Base as then in effect (other than (i) “store” cash, cash held in local,
non-concentration deposit accounts, cash in transit between stores and
depository accounts and cash receipts from sales in the process of inter-account
transfers, in each case as a result of the ordinary course operations of the
Borrower, and (ii) to the extent necessary for the Borrower and Guarantors to
satisfy in the ordinary course of their business the current liabilities
incurred by them in the ordinary course of their business and without
acceleration of the satisfaction of such current liabilities) to accumulate and
be maintained in depository accounts of the Borrower and the Guarantors.
 
   
Representations and Warranties:
  Usual and customary for facilities of this type, with exceptions,
qualifications and materiality to be mutually agreed upon by the Borrower, the
Administrative Agent and the Co-Collateral Agents, including, without
limitation, the following: (i) corporate status; (ii) corporate power and
authority and enforceability; (iii) no material violation of, or conflicts with,
law, material contracts (if any, to be mutually agreed upon by the Borrower, the
Administrative Agent and the Co-Collateral Agents) or organizational documents;
(iv) no material litigation; (v) accuracy and completeness of specified
financial statements and other information, and no material adverse change;
(vi) no required governmental or third party approvals or consents; (vii) use of
proceeds/compliance with margin regulations; (viii) valid title to property and
assets (including intellectual property and licenses), free and clear of liens,
charges and other encumbrances; (ix) status under Investment Company Act;
(x) ERISA matters; (xi) environmental matters; (xii) labor matters;
(xiii) status and adequacy of insurance; (xiv) status of subsidiaries and
perfected liens, security interests and charges; (xv) solvency; (xvi) payment of
taxes; (xvii) indebtedness and liens; (xviii) compliance with applicable laws;
(xix) no default; (xx) licenses and permits; (xxi) owned and leased business
locations; and (xxii) lines of business. In addition, the security documents
shall contain representations and warranties with respect to the Collateral
which are usual and customary for transactions of this type.
 
   
Other Covenants:
  Usual and customary affirmative and negative covenants applicable to the
Borrower and each Guarantor and their

9

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  subsidiaries appropriate to facilities of this type (with customary grace
periods, baskets and materiality qualifiers to be mutually agreed upon by the
Borrower, the Administrative Agent and the Co-Collateral Agents) to include,
without limitation, the following:
 
   
 
  a) Usual and customary financial reporting requirements, including monthly
Borrowing Base certificates (unless Excess Availability is less than (i) 20.0%
of the lesser of the Borrowing Base and the amount of the aggregate commitments
under the Facility, or (ii) $30,000,000, in which case Borrowing Base
Certificates will be furnished weekly)(to the extent possible, to include
information regarding inventory), monthly (commencing with the first month after
the first full six months ending after the Closing Date) (such monthlies to be
in a format to be mutually determined), quarterly and annual collateral and
financial reporting requirements, compliance certificates, and annual business
plans and forecasts.
 
   
 
  b) (i) Notices of defaults, notices of litigation and proceedings,
environmental actions and liabilities and ERISA and tax events and liabilities,
of changes in accounting or financial reporting practices, organizational
structure, and other business and financial information as the Administrative
Agent or any Lender shall reasonably request through the Administrative Agent;
(ii) payment of taxes and other obligations; (iii) preservation of corporate
existence, rights (charter and statutory), franchises, permits, licenses and
approvals; (iv) maintenance of properties and equipment; (v) maintenance of
appropriate and adequate insurance; (vi) visitation and inspection rights; (vi)
keeping of proper books in accordance with generally accepted accounting
principles; (vii) compliance with laws and material contracts; (viii) use of
proceeds; and (ix) further assurances, additional subsidiary guaranties and
collateral and perfection and priority of security interests.
 
   
 
  c) Field examinations and inventory appraisals will be conducted on an ongoing
basis at the reasonable discretion of the Administrative Agent or any
Co-Collateral Agent. The Borrower shall be required to pay the fees and expenses
for only two examinations/appraisals per year; provided that such limit shall be
increased to three per year if Excess Availability is less than (i) 30% of the
lesser of the Borrowing Base and the amount of the aggregate commitments under
the Facility for 3 consecutive Business Days, or (ii) $45,000,000 for 3

10

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  consecutive Business Days. In addition to the foregoing, the Administrative
Agent or any Co-Collateral Agent may undertake additional exams and appraisals
at any time at its own expense and may undertake such exams and appraisals as it
deemed necessary, at the Borrower’s expense, while an Event of Default exists.
 
   
 
  d) Limitations on (i) indebtedness, guarantees, or other contingent
obligations; (ii) liens, investments, loans, permitted acquisitions, joint
ventures, other investments, asset divestitures, dividends and distributions,
other restricted payments and prepayments, redemption or repurchase of
indebtedness, and transactions with affiliates; (iii) material changes in the
nature of business; (iv) mergers and consolidations; (v) changes of fiscal year
or amending organizational documents, or amending or otherwise modifying any
debt, any related document or any other material agreement; (vi) limitations on
intercorporate transfers; (vii) sale/leaseback transactions; (viii) granting
negative pledges; (ix) impairment of security interests and (x) changes in
accounting policies or reporting practices. All of the foregoing will be subject
to such exceptions and qualifications as the Borrower and the Lenders may
mutually agree in the definitive documentation; provided, however, that
limitations on foreign subsidiary indebtedness and liens shall be no more
restrictive than the limitations set forth in the Borrower’s existing credit
agreement and shall permit the grant of liens on intellectual property assets
owned by foreign subsidiaries. In any event, subject to other limitations
provided therein, the definitive documentation shall permit the Borrower to
(A) pay cash dividends and repurchase its capital stock if, after giving effect
to any such dividend or repurchase, the Borrower shall have certified, and shall
have delivered supporting documentation reasonably satisfactory to the
Administrative Agent, that Excess Availability is greater than (i) 30% of the
lesser of the Borrowing Base and the amount of the aggregate commitments under
the Facility immediately preceding, and on a pro forma on the date thereof and
projected basis for the 12 months following, such dividend or repurchase, and
(ii) $45,000,000, and Borrower’s minimum Fixed Charge Coverage Ratio (to be
defined in a manner to be mutually agreed upon by the Borrower, the
Administrative Agent and the Co-Collateral Agents), calculated on a trailing
12 month basis, is greater than 1.25:1.0, immediately preceding, and on a pro
forma on the date thereof and projected basis for the 12 months following, such
dividend or repurchase, and (B) make acquisitions and

11

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  other investments and repurchase debt (in addition to other carve-outs (not
subject to the following conditions) for repurchases or redemptions of
Quiksilver, Inc.’s existing senior notes in a manner to be mutually agreed upon
by the Borrower, the Administrative Agent and the Co-Collateral Agents) if,
after giving effect to any such acquisition, investment or repurchase, the
Borrower shall have certified, and shall have delivered supporting documentation
reasonably satisfactory to the Administrative Agent, that Excess Availability is
greater than (i) 30% of the lesser of the Borrowing Base and the amount of the
aggregate commitments under the Facility immediately preceding, and on a pro
forma on the date thereof and projected basis for the 12 months following, such
acquisition, other investment or repurchase, and (ii) $45,000,000, and
Borrower’s minimum Fixed Charge Coverage Ratio (to be defined in a manner to be
mutually agreed upon by the Borrower, the Administrative Agent and the
Co-Collateral Agents), calculated on a trailing 12 month basis, is greater than
1.1:1.0, immediately preceding, and on a pro forma on the date thereof and
projected basis for the 12 months following, such acquisition, other investment
or repurchase.
 
   
 
  e) Usual and customary restrictions on investments in, loans to and
distributions to non-Guarantor subsidiaries and affiliates.
 
   
 
  f) In addition, the security documents shall contain covenants with respect to
the Collateral which are usual and customary for transactions of this type.
 
   
Financial Covenants:
  a) If, at any time, Excess Availability is less than (i) 15% of the lesser of
the Borrowing Base and the amount of the aggregate commitments under the
Facility, or (ii) $30,000,000, then the Borrower will be required to maintain a
minimum Fixed Charge Coverage Ratio (excluding operations of Europe and Asia
Pacific, to be defined in a manner to be mutually agreed upon by the Borrower,
the Administrative Agent and the Co-Collateral Agents), calculated on a trailing
12 month basis, of 1.1:1.0 until Excess Availability again equals or exceeds
each of such thresholds for 60 consecutive calendar days.
 
   
 
  b) Minimum Excess Availability shall at all times be in excess of 7.5% of the
lesser of the Borrowing Base and the amount of the aggregate commitments under
the Facility, it being agreed that the Minimum Excess Availability

12

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  requirement may be amended or waived with majority Lender consent.
 
   
Events of Default:
  Usual and customary for facilities of this type, and to include, without
limitation, failure to pay any interest or principal when due, failure to comply
with covenants, material misrepresentations, insolvency, bankruptcy, cross
defaults with material indebtedness and material agreements (with a material
adverse effect standard), change of control, adverse judgments, and ERISA
defaults, with appropriate grace periods, exceptions, materiality, and baskets
to be negotiated.
 
   
Conditions Precedent:
  Closing of the Facility shall be conditioned upon satisfaction of the
following conditions and the conditions described in the letter agreement to
which this Term Sheet is attached:
 
   
 
  (a) Preparation, execution and delivery of definitive documentation with
respect to the Facility consistent with the terms hereof and reasonably
satisfactory to the Administrative Agent, BAS, the Lenders and the Borrower.
 
   
 
  (b) Administrative Agent shall have received such customary corporate
resolutions, certificates and other corporate documents as the Administrative
Agent or any Co-Collateral Agent shall reasonably request.
 
   
 
  (c) All necessary consents and approvals, if any, to the Facility shall have
been obtained.
 
   
 
  (d) Administrative Agent and the Co-Collateral Agents shall have received the
preliminary, or final if available, quarterly financial statements of the
Borrower and its subsidiaries for the fiscal quarter ending April 30, 2009,
reasonably satisfactory to the Administrative Agent and the Co-Collateral
Agents, consisting of balance sheets, income statements, and cash flow
statements.
 
   
 
  (e) Administrative Agent and the Co-Collateral Agents shall have received an
updated business plan prepared by management of the Borrower consisting of
consolidated balance sheets, statements of income or operations and cash flows
and borrowing availability forecast of the Borrower and its Subsidiaries
(excluding foreign subsidiaries other than Canadian subsidiaries and the Mexican
and Brazilian joint ventures) on a quarterly basis for the immediately following
fiscal year.
 
   
 
  (f) Each of the Administrative Agent and the Co-Collateral

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  Agents shall have completed reasonably satisfactory background checks on the
Parent, the Borrower and their management.
 
   
 
  (g) No event shall have occurred after October 31, 2008 that would reasonably
be expected to have a material adverse effect on the condition (financial or
otherwise), operations, assets, or business of the Borrower and Guarantors.
 
   
 
  (h) There shall not be any action, suit, investigation or proceeding pending
or, to the knowledge of the Borrower threatened, in any court or before any
arbitrator or governmental authority that would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), operations,
assets, or business of the Borrower and Guarantors or would reasonably be
expected to have a material adverse effect on the Facility or the transactions
contemplated thereby.
 
   
 
  (i) After giving effect to the consummation of the transactions contemplated
on the Closing Date, no Event of Default shall then exist.
 
   
 
  (j) All costs, fees and expenses (including, without limitation, reasonable
legal fees and expenses) and other compensation described in this Term Sheet and
the Fee Letter to be payable by the Borrower shall have been paid to the extent
due.
 
   
 
  (k) Receipt by the Administrative Agent of legal opinions of counsel to the
Borrower reasonably satisfactory in form and substance to the Administrative
Agent and the Co-Collateral Agents.
 
   
 
  (l) The Co-Collateral Agents shall have received (in form for filing) all
required financing statements, and obtained all such control agreements with
respect to deposit accounts (which control agreements (i) may be completed
within 10 days after the Closing Date, which grace period may be extended to 30
days after the Closing Date for selected deposit accounts acceptable to the
Co-Collateral Agents or may be reduced or eliminated by the Co-Collateral Agents
if the maturity date of the Pilot SAS Indebtedness is within 20 days of the
Closing Date, and (ii) shall be subject to such exceptions as may be acceptable
to the Co-Collateral Agents), and shall have given all such notices, as may be
necessary for the Co-Collateral Agents to perfect their security interest in the
Collateral for themselves and for the benefit of the Lenders and the

14

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  Administrative Agent and to assure their first, or second, as applicable,
priority status therein.
 
   
 
  (m) Borrower shall have entered into and received proceeds of a term loan (the
“Term Loan”), in a minimum amount of $125,000,000, on terms and conditions
substantially the same as those set forth in the term sheet in respect thereof
dated as of June 8, 2009 or as otherwise reasonably acceptable to the
Administrative Agent and the Co-Collateral Agents, including without limitation,
execution of an intercreditor agreement on terms and conditions reasonably
satisfactory to the Co-Collateral Agents.
 
   
 
  (n) After giving effect to the consummation of the transactions contemplated
on the Closing Date and the credit extensions made under the Facility on the
Closing Date Excess Availability shall be not less than $90,000,000.
 
   
 
  (o) Administrative Agent shall have received, and be reasonably satisfied
with, evidence of the Borrower’s insurance, together with such customary
endorsements as Administrative Agent or any Co-Collateral Agent may reasonably
require.
 
   
 
  (p) No material changes in governmental regulations or policies affecting the
Borrower or its subsidiaries, or the Administrative Agent or Lenders shall occur
prior to the Closing Date.
 
   
 
  (q) The Borrower shall not have executed a sale agreement with respect to the
DC Shoes business.
 
   
 
  (r) The Co-Collateral Agents shall have received all reasonably required UCC,
tax lien and litigation searches relating to the Borrower the Guarantors and
such results shall indicate the absence of liens on the assets of the Borrower
and the Guarantors, except for liens permitted under the definitive
documentation for the Facility and liens for which termination statements and
releases are being tendered concurrently with the closing of the Facility or
other arrangements reasonably satisfactory to the Co-Collateral Agents for the
delivery of such termination statements and releases have been made.
 
   
 
  (s) The Co-Collateral Agents shall have concluded with results reasonably
satisfactory to them all background checks and other investigations to ensure
compliance with the USA

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  Patriot Act, anti-money laundering laws and other applicable laws and
regulations.
 
   
 
  (t) The Co-Collateral Agents shall have received the results of, patent,
trademark and copyright searches conducted in the United States Patent and
Trademark Office and the United States Copyright Office, relating to the
Borrower the Guarantors and such results shall indicate the absence of liens on
the patents, trademarks and copyrights of the Borrower and the Guarantors,
except for liens permitted under the definitive documentation for the Facility
and liens for which releases are being tendered concurrently with the closing of
the Facility or other arrangements reasonably satisfactory to the Co-Collateral
Agents for the delivery of such releases have been made.
 
   
Expenses:
  The Borrower will pay (i) all reasonable and documented out-of-pocket expenses
of the Administrative Agent, the Co-Collateral Agents and BAS associated with
the arrangement of the Facility and the preparation, negotiation, syndication,
execution, delivery and administration of the definitive documentation and any
amendment or waiver with respect thereto (including the reasonable fees,
disbursements and other charges of a single law firm for each such agent or BAS,
auditors and appraisers, the charges of IntraLinks and the charges for any field
exams); provided that the Borrower’s liability for GECC’s and GECM’s legal fees
and expenses for the initial closing of the Facility shall not exceed $100,000,
(ii) all out-of-pocket expenses of the Administrative Agent and the
Co-Collateral Agents (including the reasonable and documented fees,
disbursements and other charges of a single law firm for each such agent) in
connection with the enforcement of the definitive documentation or in any
bankruptcy case or insolvency proceeding and (iii) the reasonable and documented
fees, disbursements and other charges of one law firm for the Lenders (other
than the Administrative Agent and the Co-Collateral Agents) in connection with
any matter referred to in clause (ii) above.
 
   
Administrative Agent’s Counsel:
  Riemer & Braunstein, LLP
 
   
Governing Law:
  State of New York

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