Exhibit 10.1


 


SECOND AMENDMENT TO REVOLVING CREDIT


AND SECURITY AGREEMENT


 


This Second Amendment to Revolving Credit and
Security Agreement (the “Second Amendment”),  is made this 30th day of September, 2010 among CROCS, INC., a corporation organized under the laws of the
State of Delaware (“Crocs”), CROCS RETAIL, INC.,
a corporation organized under the laws of the State of Colorado (“Retail”),
CROCS ONLINE, INC., a corporation
organized under the laws of the State of Colorado (“Online”), OCEAN MINDED, INC., a corporation organized under the laws
of the State of Colorado (“Ocean”), JIBBITZ, LLC, a
limited liability company organized under the laws of the State of Colorado (“Jibbitz”),
BITE, INC., a corporation organized
under the laws of the State of Colorado (“Bite”, together with Crocs,
Retail, Online, Ocean, Jibbitz and each other Person joined as a borrower from
time to time to the Loan Agreement (as defined below), collectively “Borrowers”
and each a “Borrower”), the financial institutions which are now or
which hereafter become a party hereto (collectively, the “Lenders” and
each individually a “Lender”) and PNC BANK, NATIONAL
ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such
capacity, the “Agent”).


 


BACKGROUND


 


A.                                   On September
25, 2009, Borrowers, Lenders and Agent entered into, inter  alia,
that certain Revolving Credit and Security Agreement (as same has been or may
hereafter be amended, modified, renewed, extended, restated or supplemented
from time to time, the “Loan Agreement”) to reflect certain financing
arrangements among the parties thereto. 
The Loan Agreement and all other documents executed in connection
therewith to the date hereof are collectively referred to as the “Existing
Financing Agreements”.  All
capitalized terms used and not otherwise defined herein shall have the meaning
ascribed thereto in the Loan Agreement, as amended hereby.


 


B.                                     Borrowers have requested and Agent and Lenders have agreed to modify
certain terms and provisions of the Loan Agreement on the terms and subject to
the conditions contained in this Second Amendment.


 


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


 


Section 1.                                         Amendments
to Loan Agreement.


 


(a)                                  Definitions.                                  Upon the
Effective Date (as defined below), Section 1.2 of the Loan Agreement shall be
amended by deleting the definitions of “Letter of Credit Sublimit”, “Permitted
Acquisitions”, and “Revolving Interest Rate” and replacing each as
follows:


 


“Letter
of Credit Sublimit” shall mean $10,000,000.


 


“Permitted
Acquisitions” shall mean acquisitions of the assets or Equity Interests of
another Person so long as: (a) after giving effect to such acquisition,
Borrowers have Undrawn Availability of $5,000,000; (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 $10,000,000 for any single
acquisition or $20,000,000 in any fiscal year commencing with the fiscal year
ending December 31, 2010; (c) with respect to the acquisition of Equity
Interests, (i) such acquired company shall be added as a Borrower to this
Agreement and be jointly and severally liable for all Obligations, and (ii)
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) Agent shall have
received a first-priority security interest in all acquired assets or Equity
Interests, subject to documentation satisfactory to 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 on a pro forma basis, the Borrowers would be in compliance with the
financial covenants set forth in Section 6.5 as of the most recent fiscal
quarter end and (ii) audited financial statements of the acquired entity
for the two most recent fiscal years then ended, in form and substance
reasonably acceptable to Agent, audited in accordance with GAAP; (h) if such
acquisition includes general partnership interests or any other Equity Interest
that does 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 holding company directly or indirectly
wholly-owned by a Borrower and newly formed for the sole purpose of effecting
such acquisition; (i) no assets acquired in any such transaction(s) shall be
included in the Formula Amount until Agent has received an audit of such
assets, in form and substance acceptable to Agent; and (j) no Default or Event
of Default shall have occurred or will occur after giving pro forma effect to
such acquisition. For the purposes of calculating Undrawn Availability under
this definition, any assets being acquired in the proposed acquisition shall be
included in the Formula Amount on the date of closing so long as Agent has
received an audit of such assets as set forth in clause (i) above and so long
as such assets satisfy the applicable eligibility criteria.


 


“Revolving
Interest Rate” shall mean an interest rate per annum equal to (a) the sum
of the Alternate Base Rate plus one and one half of one percent (1.50%) with
respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus
three percent (3.00%) with respect to Eurodollar Rate Loans.


 


(b)                                 New Definitions.       Upon the Effective Date (as
defined below), Section 1.2 of the Loan Agreement shall be amended by adding
the following definition in the appropriate alphabetical sequence:


 


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“Eligible
Credit Insurance Receivables” shall mean Eligible Receivables for which the
Customer is located inside the continental United States and which are
supported by credit insurance: (a) naming Agent as the beneficiary thereof,
(b)  in amounts acceptable to Agent in
its Permitted Discretion, (c) which is in form and substance satisfactory to
Agent in its Permitted Discretion, and (d) copies of which have been delivered
to Agent.


 


(c)                                  Section 2.1(a)(y)(i). Upon the
Effective Date, Section 2.1(a)(y)(i) shall be amended and restated in its
entirety as follows:


 


(i)                                     up to (A)
eighty five percent (85%), subject to the provisions of Section 2.1(b) hereof,
of Eligible Receivables, and (B) ninety percent (90%) (without duplication),
subject to the provisions of Section 2.1(b) hereof, of Eligible Credit
Insurance Receivables (collectively, the “Receivables Advance Rate”), plus


 


(d)                                 Section 2.1(c).                      Upon the Effective Date,
Section 2.1(c) of the Loan Agreement shall be amended and restated in its
entirety as follows:


 


(c)                                  Sublimit for
Revolving Advances made against Eligible Inventory. The aggregate
amount of Revolving Advances made to Borrowers against (i) Eligible Inventory
shall not exceed in the aggregate at any time outstanding, $20,000,000, and
(ii) Eligible Inventory in-transit shall not exceed in the aggregate, at any
time outstanding $2,000,000.


 


(e)                                  Section 3.2(a).  Upon the Effective Date, the first sentence
of Section 3.2(a) of the Loan Agreement shall be amended and restated in its
entirety as follows:


 


(a)                                  Borrowers shall
pay (x) to Agent, for the ratable benefit of Lenders, fees for each Letter of
Credit for the period from and excluding the date of issuance of same to and
including the date of expiration or termination, equal to the average daily
face amount of each outstanding Letter of Credit multiplied by two and one-half
of one percent (2.50%) per annum, such fees to be calculated on the basis of a
360-day year for the actual number of days elapsed and to be payable quarterly
in arrears on the first day of each quarter and on the last day of the Term,
and (y) to the Issuer, a fronting fee of one quarter of one percent (0.25%) per
annum, together with any and all administrative, issuance, amendment, payment
and negotiation charges with respect to Letters of Credit and all fees and
expenses as agreed upon by the Issuer and the Borrowing Agent in connection
with any Letter of Credit, including in connection with the opening, amendment
or renewal of any such Letter of Credit and any acceptances created thereunder
and shall reimburse Agent for any and all fees and expenses, if any, paid by
Agent to the Issuer (all of the foregoing fees, the “Letter of Credit Fees”).


 


3

















 


(f)                                    Section 3.4(a).  Upon the Effective Date, Section 3.4(a) of
the Loan Agreement shall be amended and restated in its entirety as follows:


 


(a)                                  Borrowers shall
pay Agent a collateral monitoring fee equal to $1,000 per month commencing on
the first day of the month following the Closing Date and on the first day of
each month thereafter during the Term; provided, however, that if
Borrowers are required to deliver weekly Borrowing Base Certificates in
accordance with Section 9.2 hereof, then Borrowers shall pay Agent a collateral
monitoring fee equal to $2,000 per month. 
The collateral monitoring fee shall be deemed earned in full on the date
when same is due and payable hereunder and shall not be subject to rebate or
proration upon termination of this Agreement for any reason.


 


(g)                                 Section 3.4(b).  Upon the Effective Date, Section 3.4(b) of
the Loan Agreement shall be amended and restated in its entirety as follows:


 


(b)                                 Borrowers shall
pay to Agent on the first day of the month following the month in which Agent
performs any collateral evaluation — namely any field examination, collateral
analysis or other business analysis, the need for which is to be determined by
Agent and which evaluation is undertaken by Agent or for Agent’s benefit — a
collateral evaluation fee in an amount equal to $850 per day for each person
employed to perform such evaluation, plus all reasonable costs and
disbursements incurred by Agent in the performance of such examination or
analysis; provided, however, that so long as no Default or Event
of Default has occurred and is continuing, Borrowers shall not be obligated to
pay for more than one (1) collateral evaluation fee semi-annually, unless the
Borrowers are required to deliver weekly Borrowing Base Certificates in
accordance with Section 9.2 hereof, then, in such case, Borrowers shall not be
obligated to pay for more than one (1) collateral evaluation fee every one
hundred twenty (120) days.


 


(h)                                 Section 7.1.                                     Upon the Effective Date, Section 7.1 of the
Loan Agreement shall be amended and restated in its entirety as follows:


 


7.1                                 Merger, Consolidation,
Acquisition and Sale of Assets.


 


(a)                                  Enter into any
merger, consolidation or other reorganization with or into any other Person or
acquire all or a substantial portion of the assets or Equity Interests of any
Person or permit any other Person to consolidate with or merge with it 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) as permitted by Section 7.7(iii) of this
Agreement.


 


(b)                                 Sell, lease,
transfer or otherwise dispose of any of its properties or assets, except (i)
dispositions of Inventory and Equipment to the extent expressly permitted by
Section 4.3, (ii) sales or dispositions of assets or 


 


4

















 


Subsidiaries
not to exceed $10,000,000 in any calendar year commencing with the fiscal year
ending December 31, 2010 and only so long as the net proceeds of such sales or
disposition are paid to Agent in accordance with Section 2.21, and (iii) any
other sales or dispositions expressly permitted by this Agreement


 


(i)                                     Section 7.3.                                   Upon the
Effective Date, Section 7.3 of the Loan Agreement shall be amended and restated
in its entirety as follows:


 


7.3                                 Guarantees.  Become liable upon the obligations or
liabilities of any Person by assumption, endorsement or guaranty thereof or
otherwise (other than to Lenders) except (a) the endorsement of checks in the
Ordinary Course of Business, and (b) guarantees by Borrowers of the obligations
of any other Borrower.


 


(j)                                     Section 7.5.                                 Upon the
Effective Date, Section 7.5 of the Loan Agreement shall be amended and restated
in its entirety as follows:


 


7.5                                 Loans.            Make advances, loans or
extensions of credit to any Person, including any Parent, Subsidiary or
Affiliate except (i) as otherwise permitted by this Agreement, (ii) as disclosed
on Schedule 7.5, (iii) the extension of commercial trade credit in connection
with the sale of Inventory in the Ordinary Course of Business, and (iv)
intercompany loans to Foreign Subsidiaries to the extent that (a) such
intercompany loans do not exceed $20,000,000 in the aggregate outstanding at
any time during the Term, (b) no Default or Event of Default has occurred or
would occur after giving pro forma effect to such intercompany loans, and (c)
at the time of and after giving pro forma effect to such intercompany loans,
Borrowers would have Undrawn Availability of not less than $5,000,000.


 


(k)                                  Section 7.7.                                   Upon the
Effective Date, Section 7.7 of the Loan Agreement shall be amended and restated
in its entirety as follows:


 


7.7                                 Dividends.                                    Declare, pay or
make any dividend or distribution on any Equity Interests of any Borrower
(other than dividends or distributions payable in its stock, or split-ups or
reclassifications of its stock) or apply any of its funds, property or assets
to the purchase, redemption or other retirement of any Equity Interest, or of
any options to purchase or acquire any Equity Interest of any Borrower, except
(i) dividends or distributions declared, paid or made in favor of another
Borrower, (ii) any purchase, redemption or retirement in connection with a
transaction permitted by Section 7.1(a), and (iii) any purchase, redemption or
retirement of Equity Interests of any Borrower so long as such purchase,
redemption or retirement is not made with the proceeds of any Advances and the
amount of such purchases, redemptions or retirements does not exceed
$25,000,000 in the aggregate in any calendar year.


 


5

















 


(l)                                     Section 7.8.                                   Upon the
Effective Date, Section 7.8 of the Loan Agreement shall be amended and restated
in its entirety as follows:


 


7.8                                 Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness (exclusive of trade debt (including inter-company trade debt),
accrued expenses, current and deferred tax liabilities, and accrued
restructuring charges, in each case in accordance with the past practices of
Borrowers existing as of the Closing Date) except in respect of: (i)
Indebtedness to Lenders; (ii) Indebtedness incurred for Capital Expenditures
permitted under Section 7.6 hereof; and (iii) Indebtedness owing to Foreign
Subsidiaries to the extent that such Indebtedness is subordinated to the
Obligations pursuant to a subordination agreement substantially in the form
attached hereto as Exhibit 7.8 and such Indebtedness does not exceed
$25,000,000 at any time outstanding.


 


(m)                               Section 7.10(x).                Upon the Effective Date,
clause (x) of Section 7.10 of the Loan Agreement shall be amended and restated
in its entirety as follows:


 


(x)  as
permitted by Sections 7.1(a), 7.3, 7.4(a), 7.5, 7.7 and 7.8;


 


(n)                                 Section 7.17.                             Upon the
Effective Date, Section 7.17 of the Loan Agreement shall be amended and
restated in its entirety as follows:


 


7.17                           Prepayment of Indebtedness.  At any time, directly or indirectly, prepay
any Indebtedness (other than to Lenders), or repurchase, redeem, retire or
otherwise acquire any Indebtedness of any Borrower, except the prepayment of
Indebtedness permitted by Section 7.8(iii) of this Agreement to the extent
permitted in the applicable subordination agreement.


 


(o)                                 Section 9.2.                                   Upon the
Effective Date, the first sentence of Section 9.2 of the Loan Agreement shall
be amended and restated in its entirety as follows:


 


9.2                                 Schedules.  Deliver to Agent on or before the twentieth
(20th) day of each month as and for the prior month (a) accounts receivable
ageings inclusive of reconciliations to the general ledger, (b) accounts
payable schedules inclusive of reconciliations to the general ledger, (c)
Inventory reports and (d) a Borrowing Base Certificate in form and substance
satisfactory to Agent (which shall be calculated as of the last day of the
prior month and which shall not be binding upon Agent or restrictive of Agent’s
rights under this Agreement); provided however that, if for any period of five
(5) consecutive Business Days, Borrowers Undrawn Availability is less than
$5,000,000, then, until such time as Borrowers have Undrawn Availability in
excess of $5,000,000 for each day during a consecutive three month period,
Borrowers shall deliver a Borrowing Base Certificate on or before Tuesday of
each week, calculated as of the last day of the prior week.


 


(p)                                 Section 10.6.                             Upon the
Effective Date, Section 10.6 of the Loan Agreement shall be amended and
restated in its entirety as follows:


 


6

















 


10.6                           Judgments.  Any judgment or judgments are rendered
against any Borrower in an aggregate amount in excess of $2,500,000 or against
all Borrowers in an aggregate amount in excess of $5,000,000 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 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);


 


(q)                                 Section 10.19.  Upon the Effective Date, Section 10.19 of the
Loan Agreement shall be deleted in its entirety.


 


(r)                                    Section 13.1.  Upon the Effective Date, Section 13.1 of the
Loan Agreement shall be amended and restated in its entirety as follows:


 


13.1                           Term.                  This Agreement, which shall
inure to the benefit of and shall be binding upon the respective successors and
permitted assigns of each Borrower, Agent and each Lender, shall become
effective on the date hereof and shall continue in full force and effect until
September 24, 2014 (the “Term”) unless sooner terminated as herein
provided.  Borrowers may terminate this
Agreement at any time upon ninety (90) days’ prior written notice upon payment
in full of the Obligations.  In the event
the Obligations are prepaid in full prior to the last day of the Term (the date
of such prepayment hereinafter referred to as the “Early Termination Date”),
Borrowers shall pay to Agent for the benefit of Lenders an early termination
fee in an amount equal to (y) two percent (2.0%) of the Maximum Revolving
Advance Amount if the Early Termination Date occurs on or prior to September
24, 2011, and (z) one percent (1.0%) of the Maximum Revolving Advance Amount if
the Early Termination Date occurs after September 24, 2011 through and
including September 24, 2012.


 


Section 2.                                          Amendments to Schedules to the Loan Agreement.  Each
of Schedule 4.5, Schedule 4.15(h), and Schedule 5.9 to the Loan Agreement is
hereby amended and restated in its entirety with Schedule 4.5, Schedule
4.15(h), and Schedule 5.9 attached hereto, respectively.


 


Section 3.                                          Condition Precedent.  This Second Amendment shall
be effective upon (the “Effective Date”) Agent’s receipt of:


 


(a)                                   this Second Amendment fully
executed by the Borrowers;


 


(b)                                 a fully executed copy of
that certain Copyright Security Agreement, in form and substance reasonably
satisfactory to Agent; and


 


(c)                                  a fully executed copy of a Supplement
to Trademark and Patent Security Agreement, in form and substance satisfactory
to Agent.


 


7

















 


Section 4.                                          Representations and Warranties.  Each Borrower:


 


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


 


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


 


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


 


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


 


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


 


Section 5.                                          General Provisions.


 


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


 


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


 


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


 


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


 


8

















 


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


 


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


 


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


(Signature Page Follows)


 


9

















 


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


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CROCS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Russell C. Hammer

  
	
   

  	
  Name:

  	
  Russell
  C. Hammer

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  CROCS
  RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Russell C. Hammer

  
	
   

  	
  Name:

  	
  Russell
  C. Hammer

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  CROCS
  ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Russell C. Hammer

  
	
   

  	
  Name:

  	
  Russell
  C. Hammer

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  OCEAN
  MINDED, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Russell C. Hammer

  
	
   

  	
  Name:

  	
  Russell
  C. Hammer

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  JIBBITZ,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ken Chaplin

  
	
   

  	
  Name:

  	
  Ken
  Chaplin

  
	
   

  	
  Title:

  	
  Manager

  



 


[SIGNATURE PAGE TO SECOND
AMENDMENT]


 

















 


	
   

  	
  BITE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Russell C. Hammer

  
	
   

  	
  Name:

  	
  Russell
  C. Hammer

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  PNC
  BANK, NATIONAL ASSOCIATION, As

  
	
   

  	
  Lender
  and as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steve C. Roberts

  
	
   

  	
  Name:

  	
  Steve
  C. Roberts

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


[SIGNATURE PAGE TO SECOND
AMENDMENT]