Document:

exv10w1

Exhibit 10.1

 

29 September 2009

TERM LOAN AGREEMENT

among

QS FINANCE LUXEMBOURG S.A.

as Borrower

QUIKSILVER, INC.

as Guarantor

BIARRITZ HOLDINGS S.À R.L.

as Guarantor

and

SOCIÉTÉ GÉNÉRALE

as Lender

 

19, Place Vendôme

75001 Paris

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. Interpretation
	 	 	3	 
	 
	 	 	 	 
	2. References
	 	 	24	 
	 
	 	 	 	 
	3. The Loan
	 	 	26	 
	 
	 	 	 	 
	4. Purpose
	 	 	26	 
	 
	 	 	 	 
	4.1 Purpose
	 	 	26	 
	 
	 	 	 	 
	4.2 Monitoring
	 	 	27	 
	 
	 	 	 	 
	5. Conditions of Utilization
	 	 	27	 
	 
	 	 	 	 
	5.1 Conditions precedent
	 	 	27	 
	 
	 	 	 	 
	5.2 Maximum number of Loans
	 	 	27	 
	 
	 	 	 	 
	6. Utilization
	 	 	27	 
	 
	 	 	 	 
	6.1 Delivery of a Utilization Request
	 	 	27	 
	 
	 	 	 	 
	6.2 Completion of a Utilization Request
	 	 	27	 
	 
	 	 	 	 
	6.3 Currency and amount
	 	 	28	 
	 
	 	 	 	 
	6.4 Funding
	 	 	28	 
	 
	 	 	 	 
	7. Repayment
	 	 	28	 
	 
	 	 	 	 
	7.1 Repayment of the Loan
	 	 	28	 
	 
	 	 	 	 
	8. Voluntary Prepayment and Cancellation
	 	 	29	 
	 
	 	 	 	 
	8.1 Illegality
	 	 	29	 
	 
	 	 	 	 
	8.2 Voluntary cancellation
	 	 	29	 
	 
	 	 	 	 
	8.3 Voluntary prepayment of the Loan
	 	 	29	 
	 
	 	 	 	 
	8.4 Mandatory Cancellation
	 	 	29	 
	 
	 	 	 	 
	9. Mandatory Prepayment
	 	 	30	 
	 
	 	 	 	 
	9.1 Exit
	 	 	30	 
	 
	 	 	 	 
	9.2 Disposal and Issuance Proceeds
	 	 	30	 
	 
	 	 	 	 
	9.3 Application of mandatory prepayments
	 	 	32	 
	 
	 	 	 	 
	9.4 Excluded proceeds
	 	 	32	 

(i)

 

	 	 	 	 	 
	 	 	Page	 
	10. Restrictions
	 	 	33	 
	 
	 	 	 	 
	11. Interest
	 	 	33	 
	 
	 	 	 	 
	11.1 Calculation of interest
	 	 	33	 
	 
	 	 	 	 
	11.2 Payment of interest
	 	 	33	 
	 
	 	 	 	 
	11.3 Default interest
	 	 	33	 
	 
	 	 	 	 
	11.4 Notification of rates of interest
	 	 	34	 
	 
	 	 	 	 
	11.5 Effective Global Rate (Taux Effectif Global)
	 	 	34	 
	 
	 	 	 	 
	12. Interest Periods
	 	 	35	 
	 
	 	 	 	 
	12.1 Selection of Interest Periods
	 	 	35	 
	 
	 	 	 	 
	12.2 Non-Business Days
	 	 	35	 
	 
	 	 	 	 
	13. Changes to the Calculation Of Interest
	 	 	35	 
	 
	 	 	 	 
	13.1 Absence of quotations
	 	 	35	 
	 
	 	 	 	 
	13.2 Market disruption
	 	 	35	 
	 
	 	 	 	 
	13.3 Alternative basis of interest or funding
	 	 	36	 
	 
	 	 	 	 
	13.4 Break Costs
	 	 	36	 
	 
	 	 	 	 
	14. Fees	 	 	36	 
	 
	 	 	 	 
	15. Tax Gross Up and Indemnities
	 	 	36	 
	 
	 	 	 	 
	15.1 Tax gross-up
	 	 	36	 
	 
	 	 	 	 
	15.2 Tax indemnity
	 	 	37	 
	 
	 	 	 	 
	15.3 Tax Credit
	 	 	38	 
	 
	 	 	 	 
	15.4 Stamp taxes
	 	 	38	 
	 
	 	 	 	 
	15.5 Value added tax
	 	 	38	 
	 
	 	 	 	 
	16. Increased Costs
	 	 	39	 
	 
	 	 	 	 
	16.1 Increased costs
	 	 	39	 
	 
	 	 	 	 
	16.2 Increased cost claims
	 	 	39	 
	 
	 	 	 	 
	16.3 Exceptions
	 	 	39	 
	 
	 	 	 	 
	17. Other Indemnities
	 	 	39	 
	 
	 	 	 	 
	17.1 Currency indemnity
	 	 	39	 

(ii)

 

	 	 	 	 	 
	 	 	Page	 
	17.2 Other indemnities
	 	 	40	 
	 
	 	 	 	 
	18. Mitigation by the Lender
	 	 	40	 
	 
	 	 	 	 
	18.1 Mitigation
	 	 	40	 
	 
	 	 	 	 
	18.2 Limitation of liability
	 	 	41	 
	 
	 	 	 	 
	19. Costs and Expenses
	 	 	41	 
	 
	 	 	 	 
	19.1 Transaction expenses
	 	 	41	 
	 
	 	 	 	 
	19.2 Amendment costs
	 	 	41	 
	 
	 	 	 	 
	19.3 Enforcement and preservation costs
	 	 	41	 
	 
	 	 	 	 
	20. Representations
	 	 	41	 
	 
	 	 	 	 
	20.1 Status
	 	 	41	 
	 
	 	 	 	 
	20.2 Binding obligations
	 	 	42	 
	 
	 	 	 	 
	20.3 Non-conflict with other obligations
	 	 	42	 
	 
	 	 	 	 
	20.4 Power and authority
	 	 	42	 
	 
	 	 	 	 
	20.5 Validity and admissibility in evidence
	 	 	42	 
	 
	 	 	 	 
	20.6 No Insolvency
	 	 	43	 
	 
	 	 	 	 
	20.7 No default
	 	 	44	 
	 
	 	 	 	 
	20.8 No misleading information
	 	 	44	 
	 
	 	 	 	 
	20.9 Material adverse change
	 	 	44	 
	 
	 	 	 	 
	20.10 Ranking
	 	 	44	 
	 
	 	 	 	 
	20.11 Material Trademarks
	 	 	44	 
	 
	 	 	 	 
	20.12 No proceedings pending or threatened
	 	 	45	 
	 
	 	 	 	 
	20.13 Investment Company Act
	 	 	45	 
	 
	 	 	 	 
	20.14 Carried Forward Tax Losses
	 	 	45	 
	 
	 	 	 	 
	20.15 J.P. Morgan Guarantee
	 	 	45	 
	 
	 	 	 	 
	20.16 Repetition
	 	 	46	 
	 
	 	 	 	 
	21. Information Undertakings
	 	 	46	 
	 
	 	 	 	 
	21.1 Financial statements
	 	 	46	 
	 
	 	 	 	 
	21.2 Requirements as to financial statements
	 	 	47	 

(iii)

 

	 	 	 	 	 
	 	 	Page	 
	21.3 Information: miscellaneous
	 	 	47	 
	 
	 	 	 	 
	21.4 Notification of default
	 	 	47	 
	 
	 	 	 	 
	21.5 “Know your customer” checks
	 	 	48	 
	 
	 	 	 	 
	22. General Undertakings
	 	 	48	 
	 
	 	 	 	 
	22.1 Authorizations
	 	 	48	 
	 
	 	 	 	 
	22.2 Compliance with laws
	 	 	48	 
	 
	 	 	 	 
	22.3 Negative pledge
	 	 	49	 
	 
	 	 	 	 
	22.4 Disposals
	 	 	49	 
	 
	 	 	 	 
	22.5 Merger
	 	 	50	 
	 
	 	 	 	 
	22.6 Change of business
	 	 	50	 
	 
	 	 	 	 
	22.7 Miscellaneous
	 	 	50	 
	 
	 	 	 	 
	22.8 Intellectual Property
	 	 	50	 
	 
	 	 	 	 
	22.9 Further Assurance
	 	 	51	 
	 
	 	 	 	 
	22.10 Post-closing conditions
	 	 	51	 
	 
	 	 	 	 
	22.11 Subordinated Debt
	 	 	51	 
	 
	 	 	 	 
	22.12 Pari passu ranking
	 	 	52	 
	 
	 	 	 	 
	23. Events of Default
	 	 	52	 
	 
	 	 	 	 
	23.1 Non-payment
	 	 	52	 
	 
	 	 	 	 
	23.2 Other obligations
	 	 	52	 
	 
	 	 	 	 
	23.3 Misrepresentation
	 	 	53	 
	 
	 	 	 	 
	23.4 Cross default
	 	 	53	 
	 
	 	 	 	 
	23.5 Insolvency
	 	 	54	 
	 
	 	 	 	 
	23.6 Insolvency of Quiksilver, Inc. or Quiksilver Europa
	 	 	54	 
	 
	 	 	 	 
	23.7 Insolvency proceedings
	 	 	55	 
	 
	 	 	 	 
	23.8 Creditors’ process
	 	 	56	 
	 
	 	 	 	 
	23.9 Unlawfulness
	 	 	56	 
	 
	 	 	 	 
	23.10 Material adverse change
	 	 	56	 
	 
	 	 	 	 
	23.11 Carried Forward Tax Losses
	 	 	56	 
	 
	 	 	 	 
	23.12 Acceleration
	 	 	57	 

(iv)

 

	 	 	 	 	 
	 	 	Page	 
	24. Assignments and Transfers by the Lender
	 	 	57	 
	 
	 	 	 	 
	24.1 Assignments and transfers by the Lender
	 	 	57	 
	 
	 	 	 	 
	24.2 Conditions of assignment or transfer
	 	 	58	 
	 
	 	 	 	 
	24.3 Procedure for transfer or assignment
	 	 	58	 
	 
	 	 	 	 
	24.4 Copy of Transfer Agreement to Borrower
	 	 	59	 
	 
	 	 	 	 
	24.5 Security over the Lender’s rights
	 	 	59	 
	 
	 	 	 	 
	25. Payment Mechanics
	 	 	59	 
	 
	 	 	 	 
	25.1 Payments to the Lender
	 	 	59	 
	 
	 	 	 	 
	25.2 Partial payments
	 	 	60	 
	 
	 	 	 	 
	25.3 No set-off by the Borrower
	 	 	60	 
	 
	 	 	 	 
	25.4 Business Days
	 	 	60	 
	 
	 	 	 	 
	25.5 Currency of account
	 	 	60	 
	 
	 	 	 	 
	25.6 Change of currency
	 	 	61	 
	 
	 	 	 	 
	26. Set-Off
	 	 	61	 
	 
	 	 	 	 
	27. Notices
	 	 	61	 
	 
	 	 	 	 
	27.1 Communications in writing
	 	 	61	 
	 
	 	 	 	 
	27.2 Addresses
	 	 	61	 
	 
	 	 	 	 
	27.3 Delivery
	 	 	62	 
	 
	 	 	 	 
	27.4 English language
	 	 	62	 
	 
	 	 	 	 
	28. Calculations and Certificates
	 	 	62	 
	 
	 	 	 	 
	28.1 Accounts
	 	 	62	 
	 
	 	 	 	 
	28.2 Certificates and Determinations
	 	 	63	 
	 
	 	 	 	 
	28.3 Day count convention
	 	 	63	 
	 
	 	 	 	 
	29. Partial Invalidity
	 	 	63	 
	 
	 	 	 	 
	30. Remedies and Waivers
	 	 	63	 
	 
	 	 	 	 
	31. Amendments and Waivers
	 	 	63	 
	 
	 	 	 	 
	32. Confidentiality
	 	 	63	 
	 
	 	 	 	 
	32.1 Confidential Information
	 	 	63	 

(v)

 

	 	 	 	 	 
	 	 	Page	 
	32.2 Disclosure of Confidential Information
	 	 	63	 
	 
	 	 	 	 
	32.3 Disclosure to numbering providers
	 	 	65	 
	 
	 	 	 	 
	32.4 Entire agreement
	 	 	66	 
	 
	 	 	 	 
	32.5 Inside information
	 	 	66	 
	 
	 	 	 	 
	32.6 Notification of disclosure
	 	 	67	 
	 
	 	 	 	 
	32.7 Continuing obligations
	 	 	67	 
	 
	 	 	 	 
	33. Security Sharing Agreement
	 	 	67	 
	 
	 	 	 	 
	34. Governing Law
	 	 	67	 
	 
	 	 	 	 
	35. Enforcement — Jurisdiction of French Courts
	 	 	67	 
	 
	 	 	 	 
	36. Election of Domicile
	 	 	67	 
	 
	 	 	 	 
	Schedule 1 Conditions Precedent
	 	 	69	 
	 
	 	 	 	 
	Part I Conditions Precedent to Signing
	 	 	69	 
	 
	 	 	 	 
	Part II Conditions Precedent to Closing Date
	 	 	72	 
	 
	 	 	 	 
	Schedule 2 Requests
	 	 	73	 
	 
	 	 	 	 
	Part I Utilization Request
	 	 	73	 
	 
	 	 	 	 
	Part II Selection Notice
	 	 	75	 
	 
	 	 	 	 
	Schedule 3 Timetables
	 	 	76	 
	 
	 	 	 	 
	Schedule 4 Material Subsidiaries
	 	 	77	 
	 
	 	 	 	 
	Schedule 5 Mandatory Cost Formula
	 	 	78	 

(vi)

 

	 	 	THIS AGREEMENT is made on 29 September 2009 among the following parties:
	 
	(1)	 	QS FINANCE LUXEMBOURG S.A., a Luxembourg société anonyme, with a share capital of €31,000,
whose registered office is at 11, avenue Emile Reuter, L-2420 Luxembourg, registered with the
Luxembourg Registre de Commerce et des Sociétés under number B 109.345 as borrower (the
“Borrower”);
	 
	(2)	 	QUIKSILVER, INC., a corporation incorporated under the laws of the State of Delaware, United
States of America, whose registered office is at 15202 Graham Street, Huntington Beach,
California 92649, United States of America as guarantor (“Quiksilver, Inc.”);
	 
	(3)	 	BIARRITZ HOLDINGS S.À R.L., a Luxembourg société à responsabilité limitée, with a share
capital of €1,344,530, whose registered office is at 9-11 rue Louvigny, L-1946 Luxembourg,
registered with the Luxembourg Registre de Commerce et des Sociétés under number B 147.205 as
caution réelle (“Biarritz Holdings” and, together with Quiksilver, Inc., the “Guarantors”);
and
	 
	(4)	 	SOCIÉTÉ GÉNÉRALE, a société anonyme with a share capital of €812,925,836.25, organized and
existing under the laws of the French Republic, whose registered office is at 29 boulevard
Haussmann, 75009 Paris, registered at the trade registry of Paris under number 552 120 222 RCS
Paris, as lender (the “Lender”).

- 1 -

 

WHEREAS:

	(A)	 	The Borrower has issued €50,000,000 of bonds bearing interest at 3.231% per annum and with a
final maturity date of 13 July 2010 (the “SG Bonds Maturity Date”) to Société Générale Bank &
Trust (the “SG Bonds”) pursuant to a subscription agreement (contrat de souscription) dated
11 July 2005 (the “Subscription Agreement”), which bonds have been guaranteed by Quiksilver,
Inc.;
	 
	(B)	 	The Borrower wishes to refinance the SG Bonds in full on the SG Bonds Maturity Date (the
“Refinancing”) and the Lender has agreed to provide the Borrower with financing necessary to
consummate the Refinancing on the terms and subject to the conditions set forth herein.

- 2 -

 

	 	 	IT IS AGREED AS FOLLOWS:
	 
	1.	 	INTERPRETATION

	 	 	 
	In this Agreement:
	 	 
	 
	 	 
	“Acceptable Bank”

	 	means

	 	(a)	 	a bank or financial institution which has
a rating for its long-term unsecured and non
credit-enhanced debt obligations of A or
higher by Standard & Poor’s Rating Services
or Fitch Ratings Ltd or A2 or higher by
Moody’s Investor Services Limited or a
comparable rating from an internationally
recognized credit rating agency; or
	 
	 	(b)	 	any other bank or financial institution
approved by the Lender.

	 	 	 
	“Affiliate”

	 	means, in relation to any person, a
Subsidiary of that person or a Holding
Company of that person or any other
Subsidiary of that Holding Company.
	 
	 	 
	“Authorization”

	 	means an authorization, consent, approval,
resolution, license, exemption, filing,
notarization or registration.
	 
	 	 
	“Break Costs”

	 	means the amount (if any) by which:

	 	(a)	 	the interest excluding the Margin which
the Lender should have received for the
period from the date of receipt of all or any
part of its participation in the Loan or an
Unpaid Sum to the last day of the current
Interest Period in respect of the Loan or
such Unpaid Sum, had the principal amount or
Unpaid Sum received been paid on the last day
of that Interest Period;

	 	 	 
	 

	 	exceeds:

	 	(b)	 	the amount which the Lender would be able
to obtain by placing an amount equal to the
principal amount or Unpaid Sum received by it
on deposit with a leading bank in the
European interbank market for a period
starting on the Business Day following
receipt or recovery and ending on the last
day of the current Interest Period.

	 	 	 
	“Business Day”

	 	means a day (other than a Saturday or Sunday)
on which banks are open for general business
in Paris and any TARGET Day.

- 3 -

 

	 	 	 
	“Carried Forward Tax Losses”

	 	has the meaning given to that term in Clause
23.11 (Carried Forward Tax Losses)
	 
	 	 
	“Change of Control”

	 	means:

	 	(a)	 	(x) any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such
person or its subsidiaries, and any person or
entity acting in its capacity as trustee,
agent or other fiduciary or administrator of
any such plan) other than Rhône Capital III
L.P. and its Affiliates becomes the
“beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act
of 1934, except that a person or group shall
be deemed to have “beneficial ownership” of
all securities that such person or group has
the right to acquire, whether such right is
exercisable immediately or only after the
passage of time (such right, an “option
right”)), directly or indirectly, of more
than 35% of the equity interests of
Quiksilver, Inc. entitled to vote for members
of the board of directors or equivalent
governing body of Quiksilver, Inc. on a
fully-diluted basis (and taking into account
all such equity interests that such “person”
or “group” has the right to acquire pursuant
to any option right); or
	 
	 	(y)	 	during any period of twelve (12)
consecutive months, a majority of the members
of the board of directors or other equivalent
governing body of Quiksilver, Inc. ceases to
be composed of individuals (i) who were
members of such board or equivalent governing
body on the first day of such period, (ii)
whose election or nomination to such board or
equivalent governing body was approved by
individuals referred to in preceding
sub-clause (i) constituting at the time of
such election or nomination at least a
majority of such board or equivalent
governing body or (iii) whose election or
nomination to such board or other equivalent
governing body was approved by individuals
referred to in preceding sub-clauses (i) and
(ii) constituting at the time of such
election or nomination at least a majority of
such board or equivalent governing body
(excluding, in the case of both clause (ii)
and clause (iii), any individual whose
initial nomination for, or assumption of

- 4 -

 

	 	 	 	office as, a member of that board or
equivalent governing body occurs as a result
of an actual or threatened solicitation of
proxies or consents for the election or
removal of one or more directors by any
person or group other than a solicitation for
the election of one or more directors by or
on behalf of the board of directors); or
	 
	 	(b)	 	Quiksilver, Inc. ceasing to directly or
indirectly (x) own 100% of the share capital
of QSH (on a fully-diluted basis and/or on a
non-diluted basis), or (y) own 100% of the
voting rights in QSH (on a fully-diluted
basis and/or on a non-diluted basis) or (z)
have the right or ability to control the
composition of the majority of the board of
directors (or equivalent body) of QSH; or
	 
	 	(c)	 	QSH ceasing to directly (x) own 100% of
the share capital of Biarritz Holdings (on a
fully-diluted basis and/or on a non-diluted
basis), or (y) own 100% of the voting rights
in Biarritz Holdings (on a fully-diluted
basis and/or on a non-diluted basis) or (z)
have the right or ability to control the
composition of the majority of the board of
directors (or equivalent body) of Biarritz
Holdings; or
	 
	 	(d)	 	Biarritz Holdings ceasing to directly (x)
own 99.67% of the share capital of the
Borrower or 100% of the share capital of
Quiksilver Europa (in each case, on a
fully-diluted basis and/or on a non-diluted
basis), or (y) own 99.67% of the voting
rights in the Borrower or 100% of the voting
rights in Quiksilver Europa (in each case, on
a fully-diluted basis and/or on a non-diluted
basis) or (z) have the right or ability to
control the composition of the majority of
the board of directors (or equivalent body)
of the Borrower or Quiksilver Europa; or
	 
	 	(e)	 	Quiksilver Europa ceasing to directly (x)
own 100% (less the Rossignol Vendors
Restricted Shares until they are acquired by
Quiksilver Europa as described in the
Structure Memorandum) of the share capital of
Pilot (on a fully-diluted basis and/or on a
non-diluted basis), or (y) own 100% (less the
voting rights related to the Rossignol
Vendors Restricted Shares until such shares
are acquired by Quiksilver Europa as
described in the Structure Memorandum) of the
voting rights in Pilot (on a fully-diluted
basis

- 5 -

 

	 	 	 	and/or on a non-diluted basis) or (z)
have the right or ability to control the
composition of the majority of the board of
directors (or equivalent body) of Pilot; or
	 
	 	(f)	 	Pilot ceasing to directly (x) own 100% of
the share capital of Na Pali (on a
non-diluted basis) and/or 100% (less the
shares to be issued by Na Pali to repay the
NP ORAs in accordance with the NP ORAs
Subscription Agreement until the date on
which the NP ORAs are acquired by Pilot as
described in the Structure Memorandum) of the
share capital of Na Pali on a fully-diluted
basis, or (y) own 100% of the voting rights
in Na Pali (on a non-diluted basis) and/or
100% (less the voting rights related to the
shares to be issued by Na Pali to repay the
NP ORAs in accordance with the NP ORAs
Subscription Agreement until the date on
which the NP ORAs are acquired by Pilot as
described in the Structure Memorandum) of the
voting rights in Na Pali on a fully-diluted
basis or (z) have the right or ability to
control the composition of the majority of
the board of directors (or equivalent body)
of Na Pali; or
	 
	 	(g)	 	Biarritz Holdings ceasing to directly or
indirectly own 0.33% of the share capital of
the Borrower (on a fully-diluted basis and/or
on non-diluted basis) or 0.33% of the voting
rights in the Borrower (on a fully diluted
basis and/or a non-diluted basis).

	 	 	 
	“Closing Date”

	 	means the date on which the Loan is to be
made (i.e., subject to the satisfaction of
the conditions set forth in Clause 5
(Conditions of Utilization), 13 July 2010).
	 
	 	 
	“Commitment”

	 	means the lesser of (x) the aggregate
principal amount of the SG Bonds on the SG
Bonds Maturity Date immediately prior to
repayment thereof and (y) €50,000,000, to the
extent not cancelled or reduced under this
Agreement.

- 6 -

 

	 	 	 
	“Confidential Information”

	 	means all information relating to the
Borrower, the Guarantors, the Group, the
Finance Documents or the Loan of which the
Lender becomes aware in its capacity as, or
for the purpose of becoming, the Lender or
which is received by the Lender in relation
to, or for the purpose of becoming the Lender
under, the Finance Documents or the Loan from
any member of the Group or any of its
advisers, in whatever form, and includes
information given orally and any document,
electronic file or any other way of
representing or recording information which
contains or is derived or copied from such
information but excludes information that:

	 	(i)	 	is or becomes public information other
than as a direct or indirect result of any
breach by the Lender of Clause 32
(Confidentiality); or
	 
	 	(ii)	 	is identified in writing at the time of
delivery as non-confidential by any member of
the Group or any of its advisers; or
	 
	 	(iii)	 	is known by the Lender before the date
the information is disclosed to it in
accordance with this definition or is
lawfully obtained by the Lender after that
date, from a source which is, as far as the
Lender is aware, unconnected with the Group
and which, in either case, as far as the
Lender is aware, has not been obtained in
breach of, and is not otherwise subject to,
any obligation of confidentiality.

	 	 	 
	“Confidentiality Undertaking”

	 	means a confidentiality undertaking in a form
agreed between the Borrower and the Lender.
	 
	 	 
	“DC Shoes Business”

	 	means the business of designing,
manufacturing, selling, distributing and
marketing products bearing “DC”, “DC Shoes”
and related trademarks and logos.
	 
	 	 
	“Debtor Relief Laws”

	 	means the Bankruptcy Code of the United
States of America, and all other liquidation,
conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium,
rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws
of the United States of America or other
applicable jurisdictions from time to time in
effect and affecting the rights of creditors
generally.

- 7 -

 

	 	 	 
	“Default”

	 	means an Event of Default or any event or
circumstance specified in Clause 23 (Events
Of Default) which would (with the expiry of a
grace period, the giving of notice, the
making of any determination in each case
under the Finance Documents or any
combination of any of the foregoing) be an
Event of Default.
	 
	 	 
	“Disruption Event”

	 	means either or both of:

	 	(a)	 	a material disruption to those payment or
communications systems or to those financial
markets which are, in each case, required to
operate in order for payments to be made in
connection with the Loan (or otherwise in
order for the transactions contemplated by
the Finance Documents to be carried out)
which disruption is not caused by, and is
beyond the control of, any of the Parties; or
	 
	 	(b)	 	the occurrence of any other event which
results in a disruption (of a technical or
systems-related nature) to the treasury or
payments operations of a Party preventing
that, or any other Party:

	 	(i)	 	from performing its payment obligations
under the Finance Documents; or
	 
	 	(ii)	 	from communicating with other Parties in
accordance with the terms of the Finance
Documents,

	 	 	 
	 

	 	and which (in either such case) is not caused
by, and is beyond the control of, the Party
whose operations are disrupted.

- 8 -

 

	 	 	 
	“EURIBOR”

	 	means:

	 	(A)	 	in respect of any Interest Period (other
than Interest Periods of one month):

	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for the
Interest Period of that Loan) the arithmetic
mean of the rates (rounded upwards to four
decimal places) as supplied to the Lender at
its request quoted by the Reference Banks to
leading banks in the European interbank
market,

	 	 	 
	 

	 	as of the Specified Time on the Quotation Day
for the offering of deposits in euro for a
period comparable to the Interest Period of
the Loan; and

	 	(B)	 	in respect of any Interest Period of one
month, the highest of

	 	(a)	 	the applicable Screen Rate; and
	 
	 	(b)	 	the rate determined by the Lender to be
the arithmetic mean (after excluding the
highest and the lowest quotations as long as
all Reference Banks give their quotation to
the Lender) of the annual rates (rounded
upwards to four decimal places) as supplied
to the Lender at its request, quoted by the
Reference Banks to leading banks in the Paris
interbank market,

	 	 	 
	 

	 	as of the Specified Time on the Quotation Day
for the offering of deposits in euro for a
period of one month.
	 
	 	 
	“European Group”

	 	means QSH, Biarritz Holdings and the
Subsidiaries of Biarritz Holdings.
	 
	 	 
	“Event of Default”

	 	means any event or circumstance specified as
such in Clause 23 (Events of Default).
	 
	 	 
	“Facility Office”

	 	means the office or offices notified by the
Lender to the Borrower in writing as the
office or offices through which it will
perform its obligations under this Agreement.

- 9 -

 

	 	 	 
	“Fee Letter”
	 	means the letter dated on or about the date
of this Agreement between the Lender and the
Borrower setting out any of the fees referred
to in Clause 14 (Fees).
	 
	 	 
	“Finance Document”
	 	means this Agreement, the Fee Letter, the
Guarantee, the Security Sharing Agreement,
the Subordination Agreement, the TEG Letter,
the Transaction Security Document and any
other document designated as such by the
Lender and the Borrower.
	 
	 	 
	“Financial Indebtedness”
	 	means, without double counting, any
indebtedness for or in respect of:

	 	(a)	 	moneys borrowed and debit balances at
banks or other financial institutions;
	 
	 	(b)	 	any acceptance raised under any
acceptance credit or bill discounting
facility (or dematerialized equivalent);
	 
	 	(c)	 	any note purchase facility or the issue
of bonds, notes, debentures, loan stock or
any similar instrument;
	 
	 	(d)	 	the amount of any liability in respect of
leases or hire purchase contracts which
would, in accordance with generally accepted
accounting principles as in effect from time
to time in Luxembourg and/or France, be
treated as finance or capital leases;
	 
	 	(e)	 	receivables sold or discounted (other
than any receivables to the extent they are
sold or discounted on a non-recourse basis)
including, for the avoidance of doubt,
receivables transferred under the NP
Factoring Agreements (as defined in the Pilot
and Na Pali Facilities Agreement) or under
any other factoring program;
	 
	 	(f)	 	any Treasury Transaction (as defined in
the Pilot and Na Pali Facilities Agreement)
(and, when calculating the value of that
Treasury Transaction, only the marked to
market value (or, if any actual amount is due
as a result of the termination or close-out
of that Treasury Transaction, that amount)
shall be taken into account);

- 10 -

 

	 	(g)	 	any counter-indemnity obligation in
respect of any guarantee, bond, standby or
documentary letter of credit or any other
instrument issued by a bank or financial
institution in respect of (i) an underlying
liability of an entity which is not the
Borrower or one of its Subsidiaries or a
member of the Pilot Group which liability
would fall within one of the other paragraphs
of this definition or (ii) any liabilities of
the Borrower or one of its Subsidiaries or
any member of the Pilot Group relating to any
post-retirement benefit scheme;
	 
	 	(h)	 	any amount raised by the issue of
redeemable shares which are redeemable (other
than at the option of the issuer) before the
day after the Termination Date or are
otherwise classified as borrowings under the
generally accepted accounting principles as
in effect from time to time in Luxembourg
and/or France;
	 
	 	(i)	 	any amount of any liability under an
advance or deferred purchase agreement if (i)
one of the primary reasons behind entering
into the agreement is to raise finance or to
finance the acquisition or construction of
the asset or service in question or (ii) the
agreement is in respect of the supply of
assets or services and payment is due more
than 180 days after the date of supply;
	 
	 	(j)	 	any amount raised under any other
transaction (including any forward sale or
purchase, sale and sale back or sale and
leaseback agreement) having the commercial
effect of a borrowing or otherwise classified
as borrowings under generally accepted
accounting principles as in effect from time
to time in Luxembourg and/or France, as
applicable; and
	 
	 	(k)	 	the amount of any liability in respect of
any guarantee for any of the items referred
to in paragraphs (a) to (j) above,

- 11 -

 

	 	 	 	provided that, Financial Indebtedness shall
not include the obligation to pay the
purchase price for the Rossignol Vendor
Restricted Shares pursuant to the
Shareholders’ Agreement (as defined in the
Pilot and Na Pali Facilities Agreement)

	 	 	 
	“Group”

	 	means, at any time, Quiksilver, Inc. and its
Subsidiaries.
	 
	 	 
	“Guarantee”

	 	means the guarantee, in form and substance
satisfactory to the Lender and Quiksilver,
Inc., given by Quiksilver, Inc. in respect of
the obligations under the Finance Documents.
	 
	 	 
	“Hedging Agreements”

	 	means a master agreement (being the 1992 or
the 2002 Multicurrency – Cross Border Master
Agreement published by the International
Swaps and Derivatives Association, the AFB
1994 Master Agreement entitled “Convention
Cadre relative aux Opérations de Marché à
Terme”), or the FBF 2001 Master Agreement
entitled “Convention Cadre FBF relative aux
Opérations sur Instruments Financiers à
Terme” and the related confirmations and
schedules entered into or to be entered into
by an Obligor with an Acceptable Bank for the
purpose of hedging interest rate liabilities
in relation to the Loan in accordance with
Clause 22.10 (Post-closing conditions).
	 
	 	 
	“Holding Company”

	 	means, in relation to a company or
corporation, any other company or corporation
in respect of which it is a Subsidiary.
	 
	 	 
	“Interest Period”

	 	means, in relation to the Loan, each period
determined in accordance with Clause 12
(Interest Periods) and, in relation to an
Unpaid Sum, each period determined in
accordance with Clause 11.3 (Default
interest).
	 
	 	 
	“LMA”

	 	means the Loan Market Association.
	 
	 	 
	“Loan”

	 	means the term loan made or to be made
available under this Agreement as described
in Clause 3 (The Loan) or the principal
amount outstanding for the time being of that
loan.

- 12 -

 

	 	 	 
	“Major Defaults”

	 	means each of the Defaults set out in Clause
23.1 (Non-payment), paragraphs (a), (b) and
(c) of Clause 23.4 (Cross default), Clause
23.5 (Insolvency), Clause 23.6 (Insolvency of
Quiksilver, Inc. or Quiksilver Europa),
Clause 23.7 (Insolvency proceedings), and
paragraph (i) of Clause 23.8 (Creditors’
process) (as such Clause relates to the
Borrower and Biarritz Holdings only and
excluding any Default arising as a result of
any expropriation, attachment, sequestration,
distress, execution or analogous process
initiated by the Lender or Société Générale
Bank & Trust) and Clause 23.9 (Unlawfulness).
	 
	 	 
	“Mandatory Cost”

	 	means the percentage rate per annum
calculated by the Lender in accordance with
Schedule 5 (Mandatory Cost Formula).
	 
	 	 
	“Margin”

	 	means 4.80 per cent. per annum.
	 
	 	 
	“Material Adverse Effect”

	 	means, in the reasonable opinion of the
Lender, a material adverse effect on:

	 	(a)	 	the business, operations, property,
performance, condition (financial or
otherwise) or prospects of the Borrower,
Biarritz Holdings, or Pilot and its
Subsidiaries taken as a whole; or
	 
	 	(b)	 	the ability of the Borrower or Biarritz
Holdings to perform its obligations under the
Finance Documents; or
	 
	 	(c)	 	the validity or enforceability of, or the
effectiveness or ranking of any Security
granted or purporting to be granted pursuant
to any of, the Finance Documents or the
rights or remedies of the Lender or the
Security Agent under any of the Finance
Documents.

	 	 	 
	“Material Subsidiary”

	 	means, at any time:

	 	(a)	 	the Borrower; or
	 
	 	(b)	 	Pilot, Na Pali and any Subsidiary of
Pilot which:

	 	(i)	 	is listed in Schedule 4 (Material
Subsidiaries); or
	 
	 	(ii)	 	has earnings before interest, tax,
depreciation and amortization calculated on
the same basis as EBITDA (as

- 13 -

 

	 	 	 	defined in
clause 24.1 (Financial definitions) of the
Pilot and Na Pali Facilities Agreement)
representing 5% or more of EBITDA or has
gross assets representing 5%, or more of the
gross assets of Pilot and its Subsidiaries,
calculated on a consolidated basis; or
	 
	 	(iii)	 	(to the extent the aggregate earnings
before interest, tax, depreciation and
amortization (calculated on the same basis as
EBITDA) and the aggregate gross assets of all
the entities constituting Material
Subsidiaries pursuant to the provisions of
paragraphs (a) and (b)(i) and (ii) above does
not represent at least 75% of the EBITDA of
Pilot and its Subsidiaries and at least 75%
of the consolidated gross assets of Pilot and
its Subsidiaries) any Subsidiary or
Subsidiaries of Pilot from time to time, in
order to ensure that the aggregate earnings
before interest, tax, depreciation and
amortisation (calculated on the same basis as
EBITDA) and the aggregate gross assets of all
the Material Subsidiaries represent at least
75% of the total EBITDA and 75% of the
consolidated gross assets of Pilot and its
Subsidiaries, provided that any such
Subsidiary shall constitute a Material
Subsidiary by decreasing order of its
respective earnings and gross assets;

	 	 	 
	 

	 	Compliance with the conditions set out in
paragraphs (b) (ii) and (b) (iii) shall be
determined in accordance with the Pilot and
Na Pali Facilities Agreement.
	 
	 	 
	“Material Trademarks”

	 	means (i) any of the following marks: QUIKSILVER, MOUNTAIN AND WAVE LOGO, ROXY, or
HEART LOGO, with respect to the following
jurisdictions: France, Spain, Great Britain,
Italy, Germany, Poland, Czech Republic,
Belgium, Greece, Switzerland, Russia,
Portugal, and South Africa and (ii) any other
trademarks listed on the list entitled
“Material Trademarks” delivered by the
Borrower to the Lender pursuant to Part I
(Conditions Precedent to Signing) of Schedule
1 (Conditions Precedent) and updated from
time to time pursuant to Clause 22.8
(Intellectual Property) (but excluding,

- 14 -

 

	 	 	 
	 

	 	for
the avoidance of doubt, trademarks not owned
by Biarritz Holdings and its Subsidiaries).
	 
	 	 
	“Na Pali”

	 	means Na Pali, a société par actions
simplifiée, with a share capital of
€7,130,100, whose registered office is at
162, rue Belharra, 64500 Saint Jean-de-Luz,
registered under the unique identification
number 331 377 036 RCS Bayonne.
	 
	 	 
	“NP ORAs”

	 	means the €68,500,000 mandatory convertible
bonds (obligations remboursables en actions)
issued by Na Pali on 26 April 2002 and
initially subscribed by Quiksilver Europa,
S.L (formerly designated The Aqua Division
Company, S.L.).
	 
	 	 
	“NP ORAs Subscription Agreement”

	 	means the mandatory convertible bonds
(obligations remboursables en actions)
subscription agreement dated 26 April 2002
entered into between Na Pali and Quiksilver
Europa, S.L (formerly designated The Aqua
Division Company, S.L.) and the amendment n°1
thereto dated 24 April 2009 entered into
between Na Pali, Pilot and QSH.
	 
	 	 
	“Obligor”

	 	means the Borrower and/or any Guarantor.
	 
	 	 
	“Participating Member State”

	 	means any member state of the European
Communities that adopts or has adopted the
euro as its lawful currency in accordance
with legislation of the European Union
relating to Economic and Monetary Union.
	 
	 	 
	“Party”

	 	means a party to this Agreement.
	 
	 	 
	“Permitted Disposal”

	 	means any sale, lease, license, transfer or other disposal:

	 	(a)	 	of trading stock or cash (which is not
subject to Transaction Security) made by the
Borrower or Biarritz Holdings in the ordinary
course of trading of the disposing entity;
	 
	 	(b)	 	of any asset (which is not subject to
Transaction Security) by the Borrower or
Biarritz Holdings to the Borrower or Biarritz
Holdings;
	 
	 	(c)	 	of assets (other than shares, businesses
and assets which are subject to Transaction
Security) in exchange for other assets of a
comparable or superior type, value and
quality;

- 15 -

 

	 	(d)	 	of obsolete or redundant vehicles, plant
and equipment for cash;
	 
	 	(e)	 	of Cash Equivalent Investments for Cash
(in each case as defined in the Pilot and Na
Pali Facilities Agreement) or in exchange for
other Cash Equivalent Investments;
	 
	 	(f)	 	arising as a result of any Security
permitted to Clause 22.3 (Negative pledge) or
in connection with a Permitted Loan (as
defined in the Pilot and Na Pali Facilities
Agreement);
	 
	 	(g)	 	of receivables and intra-Group loans as
described in the Structure Memorandum; and
	 
	 	(h)	 	of the DC Shoes Business.

	 	 	 
	“Permitted Security”

	 	means:

	 	(i)	 	any Security listed in schedule 5 (List
of Securities) to the Pilot and Na Pali
Facilities Agreement on the date hereof
except to the extent the principal amount
secured by that Security exceeds the amount
stated in that schedule and, in the case of
the NP Factoring Agreements (as defined in
the Pilot and Na Pali Facilities Agreement),
as replaced or renewed pursuant to any
Working Capital Financing (as defined in the
Pilot and Na Pali Facilities Agreement) (not
provided by Quiksilver, Inc.) permitted
pursuant to paragraph (vi) of clause 25.20
(Financial Indebtedness) of the Pilot and Na
Pali Facilities Agreement;
	 
	 	(ii)	 	any lien arising by operation of law
(privilège légal) and in the ordinary course
of trading and not as a result of any default
or omission by any Obligor or any member of
the Pilot Group;
	 
	 	(iii)	 	any netting or set-off arrangement
entered into by any member of the Pilot Group
in the ordinary course of its banking
arrangements for the purpose of netting debit
and credit balances;

- 16 -

 

	 	(iv)	 	any Security or Quasi-Security over or
affecting any asset acquired by a member of
the Pilot Group after the date of this
Agreement if:

	 	(A)	 	the Security or Quasi-Security was not
created in contemplation of the acquisition
of that asset by a member of the Pilot Group;
	 
	 	(B)	 	the principal amount secured has not been
increased in contemplation of, or since the
acquisition of that asset by a member of the
Pilot Group; and
	 
	 	(C)	 	the Security or Quasi-Security is removed
or discharged within 2 months of the date of
acquisition of such asset;

- 17 -

 

	 	(v)	 	any Security or Quasi-Security over or
affecting any asset of any company which
becomes a member of the Pilot Group after the
Closing Date, where the Security or
Quasi-Security is created prior to the date
on which that company becomes a member of the
Pilot Group if:

	 	(A)	 	the Security or Quasi-Security was not
created in contemplation of the acquisition
of that company;
	 
	 	(B)	 	the principal amount secured has not
increased in contemplation of or since the
acquisition of that company; and
	 
	 	(C)	 	the Security or Quasi-Security is removed
or discharged within 2 months of that company
becoming a member of the Pilot Group;

	 	(vi)	 	any Security arising under any retention
of title, hire purchase or conditional sale
arrangement or arrangements having similar
effect in respect of goods supplied to a
member of the Pilot Group in the ordinary
course of trading and on the supplier’s
standard or usual terms and not arising as a
result of any default or omission by any
member of the Pilot Group;
	 
	 	(vii)	 	any Security or Quasi-Security arising
as a consequence of any finance or capital
lease in respect of vehicles, plant,
equipment or computers, provided that the
aggregate capital value of all of such items
so leased does not exceed €500,000 (or its
equivalent in other currencies) outstanding
for the Pilot Group at any time;
	 
	 	(viii)	 	any Security entered into pursuant to
any Finance Document (as defined herein and
in the Pilot and Na Pali Facilities
Agreement);
	 
	 	(ix)	 	any transfer of receivables pursuant to
the NP Factoring Agreements (or any Working
Capital Financing (not provided by
Quiksilver, Inc.) permitted pursuant to
paragraph (vi) of clause 25.20 (Financial
Indebtedness) of the Pilot and Na Pali
Facilities Agreement);

- 18 -

 

	 	(x)	 	any transfer of receivables contemplated
under the Structure Memorandum; and
	 
	 	(xi)	 	with respect to the Pilot Group only,
any Security (including any security deposit
given in respect of rental payments under
leases of real property entered into at arms’
length terms and in the ordinary course of
business) securing indebtedness the
outstanding principal amount of which (when
aggregated with the outstanding principal
amount of any other indebtedness which has
the benefit of Security given by any member
of the Pilot Group other than any permitted
under paragraphs (i) to (x) above) does not
exceed €5,000,000 (or its equivalent in other
currencies) in the aggregate .

	 	 	 
	“Pilot”

	 	means Pilot, a société par actions simplifiée
with a share capital of €104,388.09, whose
registered office is at 162 rue Belharra,
64500 Saint-Jean-de-Luz, France registered
under the unique identification number 070
501 374 RCS Paris (transfer to RCS Bayonne
pending).
	 
	 	 
	“Pilot and Na Pali Facilities
Agreement”

	 	means the facilities agreement dated 31 July
2009 entered into among, inter alia, Pilot
and Na Pali as Borrowers, Quiksilver, Inc.
and Pilot as Original Guarantors and BNP
Paribas, Crédit Lyonnais and Société Générale
Corporate & Investment Banking, as Mandated
Lead Arrangers and BNP Paribas, as Agent and
Caisse Régionale de Crédit Agricole Mutuel
Pyrénées-Gascogne, as Issuing Bank.
	 
	 	 
	“Pilot Group”

	 	means Pilot and its Subsidiaries.
	 
	 	 
	“QSH”

	 	means QS Holdings S.à r.l., a Luxembourg
société à responsabilité limitée, with a
share capital of €8,345,580, whose registered
office is at 1 rue des Glacis, L-1628
Luxembourg, registered with the Luxembourg
Registre de Commerce et des Sociétés under
number B 103.193.

- 19 -

 

	 	 	 
	“QSH/Biarritz Holdings 

Contribution”

	 	means the contribution by QSH to Biarritz
Holdings of all of the marks held by it which
are used by Na Pali and its Subsidiaries
(including the Material Trademarks), all of
the shares of the Borrower and the other
assets and liabilities as described in the
Structure Memorandum.
	 
	 	 
	“Qualifying Lender”

	 	means the Lender if it:

	 	(i)	 	has its Facility Office in Luxembourg; or
	 
	 	(ii)	 	fulfils the conditions imposed by the
Laws of Luxembourg, in order for a payment
not to be subject to (or as the case may be,
to be exempt from) any Tax Deduction.

	 	 	 
	“Quiksilver Europa”

	 	means Quiksilver Europa SL, a company
organized under the laws of Spain, whose
registered office is at C/Serrano 73, Madrid
and registered with the Commercial Registry
of Madrid (Spain) under Volume 16,781, Page 1
and Sheet number M-286696.
	 
	 	 
	“Quotation Day”

	 	means, in relation to any period for which an
interest rate is to be determined two TARGET
Days before the first day of that period,
unless market practice differs in the
European interbank market, in which case the
Quotation Day will be determined by the
Lender in accordance with market practice in
the European interbank market (and if
quotations would normally be given by leading
banks in the European interbank market on
more than one day, the Quotation Day will be
the last of those days).
	 
	 	 
	“Quiksilver, Inc. Undertaking”

	 	means the undertaking by Quiksilver, Inc. in
the Guarantee pursuant to which Quiksilver,
Inc. agrees to provide the Borrower with the
amount of cash funds required to permit the
Borrower to make its scheduled payments
(principal, interest and otherwise) under
this Agreement as further described therein.
	 
	 	 
	“Reference Banks”

	 	means the principal office in Paris of BNP
Paribas, Crédit Lyonnais, Société Générale
and Natixis or such other banks as may be
appointed by the Lender in consultation with
the Borrower.repay the principal amount under
the SG Bonds in full

- 20 -

 

	 	 	 
	“Related Fund”

	 	in relation to a fund (the “first fund”),
means a fund which is managed or advised by
the same investment manager or investment
adviser as the first fund or, if it is
managed by a different investment manager or
investment adviser, a fund whose investment
manager or investment adviser is an Affiliate
of the investment manager or investment
adviser of the first fund.
	 
	 	 
	“Repeating Representations”

	 	means the representations and warranties set
out in Clause 20.1 (Status) to Clause 20.5
(Validity and admissibility in evidence),
Clause 20.7 (No default), Clause 20.8 (No
misleading information), paragraph 20.9.2 of
Clause 20.9 (Material adverse change), Clause
20.10 (Ranking), Clause 20.12 (No
proceedings pending or threatened), Clause
20.13 (Investment Company Act), and Clause
20.15 (J.P. Morgan Guarantee).
	 
	 	 
	“Representative”

	 	means any delegate, agent, manager,
administrator, nominee, attorney, trustee or
custodian.
	 
	 	 
	“Rhône Financing Documents”

	 	means (i) that certain credit agreement dated
as of 31 July 2009 among Mountain and Wave
S.à. r.l., Quiksilver, Inc., the lenders
party thereto and Rhône Group L.L.C., as
administrative agent, and (ii) that certain
credit agreement dated as of 31 July 2009
among Quiksilver, Inc., Quiksilver Americas,
Inc., the lenders party thereto and Rhône
Group L.L.C., as administrative agent.
	 
	 	 
	“Rossignol Vendors”

	 	means Laurent Boix-Vives, Jeanine Boix-Vives,
Christine Simon and Sylvie Bernard.
	 
	 	 
	“Rossignol Vendors Restricted 

Shares”

	 	means the 146,619 preferred shares (actions
de préférence) of Pilot held by the Rossignol
Vendors.
	 
	 	 
	“Screen Rate”

	 	means the percentage rate per annum
determined by the Banking Federation of the
European Union for the relevant period,
displayed on the appropriate page of the
Reuters screen. If the agreed page is
replaced or service ceases to be available,
the Lender may specify another page or
service displaying the appropriate rate after
consultation with the Borrower.
	 
	 	 
	“Security”

	 	means a mortgage, charge, pledge, lien or
other security interest securing any
obligation of any person or any other
agreement or arrangement having a similar
effect.

- 21 -

 

	 	 	 
	“Security Agent”

	 	means Société Générale, in its capacity as
security agent appointed pursuant to the
Security Sharing Agreement, or any successor
thereof appointed in accordance with the
Security Sharing Agreement.
	 
	 	 
	“Security Sharing Agreement”

	 	means the security sharing agreement dated 25
September 2009 among, inter alia, the
Obligors, the Security Agent, the Agent, the
Lenders, the Arrangers, the Original
Ancillary Lender, the Issuing Bank and the
Lender.
	 
	 	 
	“Selection Notice”

	 	means a notice substantially in the form set
out in Part II of Schedule 2 given in
accordance with Clause 12 (Interest Periods).
	 
	 	 
	“Senior Facilities”

	 	means the Facilities (as defined in the Pilot
and Na Pali Facilities Agreement).
	 
	 	 
	“Senior Facilities Closing Date”

	 	means the Closing Date (as defined in the
Pilot and Na Pali Facilities Agreement).
	 
	 	 
	“Senior Notes”

	 	means the 6-7/8% senior notes due 2015 issued
by Quiksilver, Inc. which are subject to the
terms of the Indenture dated 22 July 2005
entered into among Quiksilver, Inc., the
Subsidiary Guarantors parties thereto and
Wilmington Trust Company as Trustee.
	 
	 	 
	“Specified Time”

	 	means a time determined in accordance with
Schedule 3.
	 
	 	 
	“Structure Memorandum”

	 	has the meaning given to it in the Pilot and
Na Pali Facilities Agreement.
	 
	 	 
	“Subordinated Debt”

	 	has the meaning given to that term in the
Subordination Agreement.
	 
	 	 
	“Subordination Agreement”

	 	means the subordination agreement dated 25
September 2009 among, inter alia, Quiksilver,
Inc. as Parent, the Borrower as SG Financing
Debtor, Société Générale, as Security Agent,
the Subordinated Creditors and the
Intra-Group Debtors (in each case, as defined
in the Subordination Agreement).
	 
	 	 
	“Subsidiary”

	 	means, in relation to any company, another
company which is directly or indirectly
controlled by it within the meaning of
article L.233-3 of the French Code de
Commerce.

- 22 -

 

	 	 	 
	“TARGET2”

	 	means the Trans-European Automated Real-time
Gross Settlement Express Transfer payment
system which utilizes a single shared
platform and which was launched on 19
November 2007.
	 
	 	 
	“TARGET Day”

	 	means any day on which TARGET2 is open for
the settlement of payments in euro.
	 
	 	 
	“Tax”

	 	means any tax, levy, impost, duty or other
charge or withholding of a similar nature
(including any penalty or interest payable in
connection with any failure to pay or any
delay in paying any of the same).
	 
	 	 
	“Tax Credit”

	 	means a credit against, relief or remission
for, or repayment of any Tax.
	 
	 	 
	“Tax Deduction”

	 	means a deduction or withholding for or on
account of Tax from a payment under a Finance
Document.
	 
	 	 
	“TEG Letter”

	 	has the meaning given to that term in Clause
11.5 (Effective Global Rate (Taux Effectif
Global)).
	 
	 	 
	“Termination Date”

	 	means 31 July 2013.
	 
	 	 
	“Transaction Security”

	 	means the Security created or expressed to be
created in favor of the Security Agent
pursuant to the Transaction Security
Documents.
	 
	 	 
	“Transaction Security Document”

	 	means the Luxembourg law first ranking pledge
agreement executed by Biarritz Holdings as
pledgor over the marks and trademarks owned
by it (such marks and trademarks to include
the Material Trademarks and other trademarks
held by Biarritz Holdings and used by Pilot
and its Subsidiaries) to secure the
obligations of Pilot and Na Pali under the
Senior Facilities and the obligations of the
Borrower under the Finance Documents.
	 
	 	 
	“Transfer Agreement”

	 	means an agreement substantially in the form
agreed between the Lender and the Borrower.
	 
	 	 
	“Transfer Date”

	 	means, in relation to an assignment or a
transfer, the later of:

	 	(a)	 	the proposed Transfer Date specified in
the relevant Transfer Agreement; and
	 
	 	(b)	 	the date on which the Lender executes the
Transfer Agreement.

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	“Treaty Lender”

	 	means the Lender if it is entitled to a
payment under a double taxation agreement
(subject to the completion of any necessary
procedural formalities) without a Tax
Deduction or with the benefit of a Tax
Credit.
	 
	 	 
	“Unpaid Sum”

	 	means any sum due and payable but unpaid by
the Borrower under the Finance Documents.
	 
	 	 
	“US Group”

	 	means Quiksilver Americas, Inc. and its
Subsidiaries.
	 
	 	 
	“US Group Change of Control”

	 	means Quiksilver, Inc. ceasing to directly or
indirectly (x) own at least 95% of the share
capital of Quiksilver Americas, Inc. (on a
fully-diluted basis and/or on a non-diluted
basis), or (y) own at least 95% of the voting
rights in Quiksilver Americas, Inc. (on a
fully-diluted basis and/or on a non-diluted
basis) or (z) have the right or ability to
control the composition of the majority of
the board of directors (or equivalent body)
of Quiksilver Americas, Inc.
	 
	 	 
	“Utilization”

	 	means the utilization of the Loan.
	 
	 	 
	“Utilization Request”

	 	means a notice substantially in the form set
out in Part I of Schedule 2.
	 
	 	 
	“VAT”

	 	means value added tax in any jurisdiction and
any other tax of a similar nature.
	 
	 	 
	“2009 ABL Agreement”

	 	means that certain credit agreement dated as
of 31 July 2009 among Quiksilver Americas,
Inc, the other borrowers party thereto,
Quiksilver, Inc., the lenders party thereto,
Bank of America, N.A. as administrative
agent, Bank of America, N.A. and General
Electric Capital Corporation, as
co-collateral agents, and the other agents
party thereto, and any refinancings,
refundings, renewals or extensions thereof
permitted hereunder.

	2.	 	REFERENCES

	 	(a)	 	Unless a contrary indication appears, any reference in this Agreement to:

	 	(i)	 	the “Lender”, any “Obligor” or any “Party” shall be construed
so as to include its successors in title, permitted assigns and permitted
transferees;
	 
	 	(ii)	 	“assets” includes present and future properties, revenues and
rights of every description;
	 
	 	(iii)	 	“corporate reconstruction” includes in relation to any company
any

- 24 -

 

	 	 	 	contribution of part of its business in consideration of shares (apport
partiel d’actifs) and any demerger (scission) implemented in accordance with
articles L.236 1 to L.236 24 of the French Code de Commerce;
	 
	 	(iv)	 	a “Finance Document” or any other agreement or instrument is a
reference to that Finance Document or other agreement or instrument as amended
or novated, supplemented, extended or restated;
	 
	 	(v)	 	“gross negligence” means “faute lourde”;
	 
	 	(vi)	 	a “guarantee” includes any “cautionnement”, “aval” and any
“garantie” which is independent from the debt to which it relates;
	 
	 	(vii)	 	“indebtedness” includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money, whether present
or future, actual or contingent;
	 
	 	(viii)	 	“merger” includes any fusion implemented in accordance with articles L.236 1
to L.236 24 of the French Code de Commerce;
	 
	 	(ix)	 	a “person” includes any individual, firm, company, corporation,
government, state or agency of a state or any association, trust, joint
venture, consortium or partnership (whether or not having separate legal
personality);
	 
	 	(x)	 	“procure” means a promesse de porte-fort in accordance with
article 1120 of the French Code civil;
	 
	 	(xi)	 	a “regulation” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law) of any
governmental, intergovernmental or supranational body, agency, department or of
any regulatory, self-regulatory or other authority or organization;
	 
	 	(xii)	 	a “security interest” includes any type of security (sûreté
réelle) and transfer by way of security;
	 
	 	(xiii)	 	“trustee, fiduciary and fiduciary duty” has in each case the meaning given to
such term under any applicable law;
	 
	 	(xiv)	 	“willful misconduct” means “dol”;
	 
	 	(xv)	 	a provision of law is a reference to that provision as amended
or re-enacted; and
	 
	 	(xvi)	 	unless a contrary indication appears, a time of day is a
reference to Paris time.

	 	(b)	 	Section, Clause and Schedule headings are for ease of reference only.
	 
	 	(c)	 	Unless a contrary indication appears, a term used in any other Finance

- 25 -

 

	 	 	 	Document or in any notice given under or in connection with any Finance Document has
the same meaning in that Finance Document or notice as in this Agreement.
	 
	 	(d)	 	A Default is “continuing” if it has not been remedied or waived and an Event of
Default is continuing if it has not been remedied or waived.
	 
	 	(e)	 	In this Agreement, unless a contrary indication appears, words importing the
plural shall include the singular and vice versa.
	 
	 	(f)	 	Without prejudice to the generality of any provision of this Agreement, in this
Agreement where it relates to an Obligor organized under the laws of Luxembourg, a
reference to:

	 	(i)	 	a winding-up, administration or dissolution includes, without
limitation, bankruptcy (faillite), insolvency, liquidation, composition with
creditors (concordat préventif de faillite), moratorium or reprieve from
payment (sursis de paiement), controlled management (gestion contrôlée),
fraudulent conveyance (actio pauliana), general settlement with creditors,
reorganization or similar laws affecting the rights of creditors generally;
	 
	 	(ii)	 	a receiver, administrative receiver, administrator, trustee,
custodian, sequestrator, conservator or similar officer includes, without
limitation, a juge délégué, commissaire, juge-commissaire, mandataire ad hoc,
administrateur provisoire, liquidateur or curateur;
	 
	 	(iii)	 	a lien or security interest includes any hypothèque,
nantissement, gage, privilège, sûreté réelle, droit de retention, and any type
of security in rem (sûreté réelle) or agreement or arrangement having a similar
effect and any transfer of title by way of security;
	 
	 	(iv)	 	a guarantee includes any cautionnement, aval and any garantie
which is independent from the debt to which it relates; and
	 
	 	(v)	 	a person being unable to pay its debts includes that person
being in a state of cessation de paiements,

	 	 	 	in each case, as such terms would be interpreted under the laws of Luxembourg.

	3.	 	THE LOAN
	 
	 	 	Subject to the terms of this Agreement, the Lender makes available to the Borrower, a euro
term loan in an aggregate amount equal to the Commitment.
	 
	4.	 	PURPOSE
	 
	4.1	 	Purpose
	 
	 	 	The Borrower shall apply all amounts borrowed by it under the Loan towards the consummation
of the Refinancing.

- 26 -

 

	4.2	 	Monitoring
	 
	 	 	The Lender is not bound to monitor or verify the application of any amount borrowed pursuant
to this Agreement.
	 
	5.	 	CONDITIONS OF UTILIZATION
	 
	5.1	 	Conditions precedent
	 
	5.1.1.	 	The Lender will only be obliged to comply with Clause 6.4 (Funding) if (i) the Borrower has
delivered a duly completed Utilization Request and (ii) the Lender has received all of the
documents and other evidence listed in Part I of Schedule 1 (Conditions Precedent) in form and
substance satisfactory to the Lender. The Lender shall notify the Borrower promptly upon
being so satisfied.
	 
	5.1.2.	 	Subject to Clause 5.1.1, the Lender will only be obliged to comply with Clause 6.4 (Funding)
if on the date of the Utilization Request and on the proposed Closing Date:

	 	(a)	 	no Major Default is continuing or would result from the proposed Loan; and
	 
	 	(b)	 	the representations and warranties set out in Clause 20.6 (No Insolvency),
paragraph 20.7.2 of Clause 20.7 (No default) and Clause 20.10 (Ranking) are true in all
material respects.

	5.2	 	Maximum number of Loans
	 
	 	 	Only one Loan may be outstanding at all times and only one Utilization may be made under the
Loan.
	 
	6.	 	UTILIZATION
	 
	6.1	 	Delivery of a Utilization Request
	 
	 	 	The Borrower may utilize the Loan by delivery to the Lender of a duly completed Utilization
Request not later than the Specified Time.
	 
	6.2	 	Completion of a Utilization Request
	 
	 	 	The Utilization Request is irrevocable and will not be regarded as having been duly
completed unless:

	 	(i)	 	the proposed date of Utilization is the Closing Date;
	 
	 	(ii)	 	the currency and amount of the Utilization comply with Clause
6.3 (Currency and amount); and
	 
	 	(iii)	 	the proposed Interest Period complies with Clause 12 (Interest
Periods).

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	6.3	 	Currency and amount
	 
	6.3.1.	 	The currency specified in a Utilization Request must be euro.
	 
	6.3.2.	 	The amount of the proposed Loan must be €50,000,000 or, if less, the amount necessary to
consummate the Refinancing and in any event may not exceed the amount of the Commitment.
	 
	6.4	 	Funding
	 
	 	 	If the conditions set out in this Agreement have been met, the Lender shall make the Loan
available by the Closing Date to the Borrower by making the proceeds of the Loan directly
available to Société Générale Bank & Trust in the Borrower’s account (IBAN LU62 061 457976
2600 EUR/BIC: SGABLULL) to repay the principal amount under the SG Bonds in full. In
connection with the funding, the Borrower agrees to provide, and/or agrees that the Lender
may provide, a copy of this Agreement to Société Générale Bank & Trust.
	 
	7.	 	REPAYMENT
	 
	7.1	 	Repayment of the Loan
	 
	7.1.1.	 	The Borrower shall repay the Loan in installments by repaying on each date set forth below
an amount which reduces the principal amount of the outstanding Loan by the amount set out
opposite that date below:

	 	 	 
	Repayment Date	 	Repayment Installment
	31 July 2011

	 	€8,900,000
	 
	 	 
	31 January 2012

	 	€6,000,000
	 
	 	 
	31 July 2012

	 	€6,600,000
	 
	 	 
	31 January 2013

	 	€6,400,000
	 
	 	 
	31 July 2013

	 	€22,100,000 (or such lesser amount as equals the principal
amount of the Loan outstanding on 31 July 2013)

	 	 	provided that reductions of the Commitment pursuant to Clause 8.4.2 prior to the Closing
Date arising from a voluntary, partial repayment of SG Bonds shall reduce the Loan
installments set forth above in chronological order.

- 28 -

 

	7.1.2.	 	The Borrower may not re-borrow any part of the Loan which is repaid.
	 
	7.1.3.	 	For the avoidance of doubt, all of the outstanding principal of the Loan shall be repaid in
full on the Termination Date.
	 
	8.	 	VOLUNTARY PREPAYMENT AND CANCELLATION
	 
	8.1	 	Illegality
	 
	 	 	If it becomes unlawful in any applicable jurisdiction for the Lender to perform any of its
obligations as contemplated by this Agreement or to fund or maintain its participation in
the Loan:

	 	(a)	 	the Lender shall promptly notify the Borrower upon becoming aware of that
event;
	 
	 	(b)	 	upon the Lender notifying the Borrower, the Commitment of the Lender (if any)
will be immediately cancelled; and
	 
	 	(c)	 	the Borrower shall repay the Loan on the last day of the Interest Period for
the Loan occurring after the Lender has notified the Borrower or, if earlier, the date
specified by the Lender in the notice delivered to the Borrower (being no earlier than
the last day of any applicable grace period permitted by law).

	8.2	 	Voluntary cancellation
	 
	 	 	The Borrower may, if it gives the Lender not less than 5 Business Days’ (or such shorter
period as the Lender may agree) prior notice, cancel the whole or any part (but, if in part,
being a minimum amount of €5,000,000) of the Commitment.
	 
	8.3	 	Voluntary prepayment of the Loan
	 
	8.3.1.	 	The Borrower may, if it gives the Lender not less than 5 Business Days’ (or such shorter
period as the Lender may agree) prior notice, prepay the whole or any part of the Loan (but,
if in part, being an amount that reduces the amount of the Loan by a minimum amount of
€5,000,000).
	 
	8.3.2.	 	The Loan may only be prepaid after the Closing Date.
	 
	8.3.3.	 	Any prepayment under this Clause 8.3 shall satisfy the obligations under Clause 7.1
(Repayment of the Loan) in chronological order.
	 
	8.4	 	Mandatory Cancellation
	 
	8.4.1.	 	The Commitment shall be immediately cancelled upon funding of the Loan and in any event at
the end of the day on the Closing Date.

- 29 -

 

	8.4.2.	 	If any portion of the principal amount of the SG Bonds is repaid prior to the SG Bonds
Maturity Date, the Commitment shall be automatically reduced in an equivalent amount.
	 
	9.	 	MANDATORY PREPAYMENT
	 
	9.1	 	Exit
	 
	 	 	Upon the occurrence of:

	 	(a)	 	a Change of Control; or
	 
	 	(b)	 	any mandatory prepayment event (in whole or in part) of any Financial
Indebtedness under the 2009 ABL Agreement, the Senior Notes, the Pilot and Na Pali
Senior Facilities Agreement and/or the Rhône Financing Documents (or any document
entered into in replacement or refinancing thereof (in whole or in part)) as a result
of the implementation of (x) any provision relating to any change in the shareholding
of Quiksilver, Inc., the composition of the board of directors or any governing body of
Quiksilver, Inc. or (y) any other provisions relating to the change of control of
Quiksilver, Inc. (however described) under any of such documents or agreements; or
	 
	 	(c)	 	the sale, disposal or transfer (for any reason whatsoever) (other than (i) the
QSH/Biarritz Holdings Contribution and (ii) the entering into of the Transaction
Security Document) by Quiksilver, Inc. or any of its Subsidiaries of any of the
Material Trademarks or the sale, disposal or transfer (for any reason whatsoever) by
Quiksilver, Inc. or any of its Subsidiaries of any person holding, directly or
indirectly, any of the Material Trademarks (other than a sale, disposal or transfer by
an indirect shareholder of Biarritz Holdings to another Subsidiary of Quiksilver,
Inc.); or
	 
	 	(d)	 	the sale, disposal or transfer (for any reason whatsoever) of all or
substantially all of the assets of QSH, Biarritz Holdings or any Subsidiary of Biarritz
Holdings or Pilot or any Subsidiary of Pilot whether in a single transaction or a
series of related transactions; or
	 
	 	(e)	 	a US Group Change of Control; or
	 
	 	(f)	 	the sale, disposal or transfer (for any reason whatsoever) of all or
substantially all of the assets of the US Group whether in a single transaction or a
series of related transactions,

	 	 	the Commitment (if any) will be cancelled and the Loan, together with accrued interest, and
all other amounts accrued under the Finance Documents, shall become immediately due and
payable.
	 
	9.2	 	Disposal and Issuance Proceeds
	 
	9.2.1.	 	For the purposes of this Clause 9 (Mandatory Prepayment):
	 
	 	 	“Disposal” means a sale, lease, license, transfer, loan or other disposal by a person of any
asset (of any nature whatsoever), undertaking or business (whether by a voluntary

- 30 -

 

		 	or involuntary single transaction or series of transactions) other than a sale, lease,
license, transfer, loan or other disposal described in paragraphs (a), (b), (c), (e), (f),
(g) and (h) of the definition of Permitted Disposals.
	 
	 	 	“Disposal Proceeds” means the consideration receivable by the Borrower or Biarritz Holdings
(including any amount receivable in repayment of intercompany debt) for any Disposal made by
the Borrower or Biarritz Holdings except for Excluded Disposal Proceeds and after deducting:

	 	(i)	 	any reasonable costs and expenses which are incurred by the
Borrower or Biarritz Holdings with respect to such Disposal to persons who are
not the Borrower or Biarritz Holdings; and
	 
	 	(ii)	 	any Tax incurred and required to be paid by the seller in
connection with such Disposal (as reasonably determined by the seller, on the
basis of existing rates and taking account of any available credit, deduction
or allowance).

	 	 	“European Issuance Proceeds” means all proceeds of any equity, quasi-equity or debt capital
market issuance (i) made by Biarritz Holdings or the Borrower or (ii) made by Quiksilver,
Inc. or any of its Subsidiaries and secured in whole or in part by assets held by Biarritz
Holdings or any Subsidiary of Biarritz Holdings and after deducting any reasonable expenses
which are incurred by Biarritz Holdings or any Subsidiary of Biarritz Holdings with respect
to that issuance.
	 
	 	 	“Excluded Disposal Proceeds” means in respect of Disposals relating to assets other than
shares, securities or on-going business (fonds de commerce), the related Disposal Proceeds
which do not exceed in the aggregate in any financial year of the Borrower €2,000,000 (or
its equivalent in other currencies).
	 
	 	 	“Excluded Insurance Proceeds” means any proceeds of an insurance claim which the Borrower
notifies the Lender are, or are to be, applied:

	 	(i)	 	to meet a third party claim;
	 
	 	(ii)	 	to cover operating losses in respect of which the relevant
insurance claim was made; or
	 
	 	(iii)	 	in the replacement, reinstatement and/or repair of the assets
or otherwise in amelioration of the loss in respect of which the relevant
insurance claim was made,

	 	 	in each case as soon as possible (but in any event within 180 days, or such longer period as
the Lender may agree) after receipt.
	 
	 	 	“Insurance Proceeds” means the proceeds of any insurance claim under any insurance
maintained by the Borrower except for Excluded Insurance Proceeds and after deducting any
reasonable expenses in relation to that claim which are incurred by the Borrower to persons
other than Pilot or any of its Subsidiaries to the extent the aggregate amount of all such
proceeds equals or exceeds €500,000 in any financial year of the Borrower.

- 31 -

 

	9.2.2.	 	The Borrower shall prepay the Loan in the following amounts at the times contemplated by
Clause 9.3 (Application of mandatory prepayments):

	 	(a)	 	the amount of Disposal Proceeds not required to repay the Senior Facilities;
	 
	 	(b)	 	the amount of Insurance Proceeds not required to repay the Senior Facilities;
and
	 
	 	(c)	 	the amount of European Issuance Proceeds not required to repay the Senior
Facilities.

	9.3	 	Application of mandatory prepayments
	 
	9.3.1.	 	The Borrower shall prepay the Loan in accordance with Clause 9.2 (Disposal and Issuance
Proceeds) promptly upon receipt of any Disposal Proceeds, Insurance Proceeds or European
Issuance Proceeds.
	 
	9.3.2.	 	A prepayment under Clause 9.2 (Disposal and Issuance Proceeds) shall be applied to prepay
the Loan against the scheduled installments on a pro rata basis.
	 
	9.4	 	Excluded proceeds
	 
	 	 	Where Excluded Insurance Proceeds include amounts which are intended to be used for a
specific purpose within a specified period (as set out in the relevant definition of
Excluded Insurance Proceeds), the Borrower shall ensure that those amounts are used for that
purpose and, if requested to do so by the Lender, shall promptly deliver a certificate to
the Lender at the time of such application and at the end of such period confirming the
amount (if any) which has been so applied within the requisite time periods provided for in
the relevant definition.
	 
	9.5	 	Restrictions on Mandatory Prepayments
	 
	9.5.1.	 	Mandatory prepayments required pursuant to the terms of Clause 9.2 (Disposal and Issuance
Proceeds) will be limited to an amount determined according to the following formula (to the
extent the amount owed by the Borrower corresponds to amounts, proceeds or distributions
received by a Subsidiary of the Borrower):
	 
	 	 	Cash of the Borrower + [(amount of distributable profits of the Borrower’s Subsidiaries +
amount of distributable reserves of such Subsidiaries)] X [percentage of shares held
directly or indirectly by the Borrower in each of its Subsidiaries] + [amount of shareholder
capital accounts and loans by the Borrower to its Subsidiaries] + [amount of loans which
could be made by the Borrower’s Subsidiaries to the Borrower without violating applicable
laws and regulations].
	 
	9.5.2.	 	Each Obligor shall, subject to applicable laws and regulations, directly or indirectly
through Subsidiaries, employ all available means and cause each Subsidiary to employ all
available means to ensure the distribution (in any form, including capital account
distributions or loans) of amounts necessary to make all mandatory prepayments required
hereunder.
	 
	9.5.3.	 	Any prepayment obligation by the Borrower which is limited by the provisions of this Clause
9.5 shall be on-going and shall be reinstated at the time and to the extent that
the events or circumstances giving rise to such limitation shall cease to exist.

- 32 -

 

	10.	 	RESTRICTIONS
	 
	10.1.1.	 	Any notice of cancellation or prepayment given by any Party under Clauses 8 (Voluntary
Prepayment and Cancellation) or 9 (Mandatory Prepayment) shall be irrevocable and, unless a
contrary indication appears in this Agreement, shall specify the date or dates upon which the
relevant cancellation or prepayment is to be made and the amount of that cancellation or
prepayment.
	 
	10.1.2.	 	Any prepayment under this Agreement shall be made together with accrued interest on the
amount prepaid and, subject to any Break Costs, without premium or penalty.
	 
	10.1.3.	 	The Borrower may not re-borrow any part of the Loan which is prepaid.
	 
	10.1.4.	 	The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any
part of the Commitment except at the times and in the manner expressly provided for in this
Agreement.
	 
	10.1.5.	 	No amount of the Commitment cancelled under this Agreement may be subsequently reinstated.
	 
	11.	 	INTEREST
	 
	11.1	 	Calculation of interest
	 
	 	 	The rate of interest on the Loan for each Interest Period is the percentage rate per annum
which is the aggregate of the applicable:

	 	(a)	 	Margin;
	 
	 	(b)	 	EURIBOR; and
	 
	 	(c)	 	Mandatory Cost, if any.

	11.2	 	Payment of interest
	 
	 	 	The Borrower shall pay accrued interest on the Loan on the last day of each Interest Period
(and, if the Interest Period is longer than six months, on the dates falling at six monthly
intervals after the first day of the Interest Period).
	 
	11.3	 	Default interest
	 
	11.3.1.	 	If the Borrower fails to pay any amount payable by it under a Finance Document on its due
date, interest shall accrue to the fullest extent permitted by law on the overdue amount from
the due date up to the date of actual payment (both before and after judgment) at a rate
which, subject to Clause 11.3.2 below, is 2.0 per cent higher than the rate which would have
been payable if the overdue amount had, during the period of non-payment, constituted a
portion of the Loan for successive Interest Periods, each of a duration selected by the Lender
(acting reasonably). Any interest accruing under this Clause 11.3 shall be immediately payable
by the Borrower on demand by the Lender.

- 33 -

 

	11.3.2.	 	If any overdue amount consists of all or part of the Loan which became due on a day which
was not the last day of an Interest Period:

	 	(a)	 	the first Interest Period for that overdue amount shall have a duration equal
to the unexpired portion of the current Interest Period; and
	 
	 	(b)	 	the rate of interest applying to the overdue amount during that first Interest
Period shall be 2.0 per cent. higher than the rate which would have applied if the
overdue amount had not become due.

	11.3.3.	 	Default interest (if unpaid) arising on an overdue amount will be compounded with the
overdue amount only if, within the meaning of Article 1154 of the French Code Civil, such
interest is due for a period of at least one year, but will remain immediately due and
payable.
	 
	11.4	 	Notification of rates of interest
	 
	 	 	The Lender shall promptly notify the Borrower of the determination of a rate of interest
under this Agreement.
	 
	11.5	 	Effective Global Rate (Taux Effectif Global)
	 
	 	 	For the purposes of Articles L313-1 et seq, R 313-1 and R313-2 of the Code de la
Consommation, the Parties acknowledge that by virtue of certain characteristics of the Loan
(and in particular the variable interest rate applicable to Loan and the Borrower’s right to
select the duration of the Interest Period of the Loan) the taux effectif global cannot be
calculated at the date of this Agreement. However, the Borrower acknowledges that it has
received from the Lender a letter containing an indicative calculation of the taux effectif
global, based on examples calculated on assumptions as to the taux de période and durée de
période set out in the letter (the “TEG Letter”). The Parties acknowledge that such letter
forms part of this Agreement.

- 34 -

 

	12.	 	INTEREST PERIODS
	 
	12.1	 	Selection of Interest Periods
	 
	12.1.1.	 	The Borrower may select an Interest Period for the Loan in the Utilization Request or (if
the Loan has already been borrowed) in a Selection Notice.
	 
	12.1.2.	 	Each Selection Notice is irrevocable and must be delivered to the Lender by the Borrower
not later than the Specified Time.
	 
	12.1.3.	 	If the Borrower fails to deliver a Selection Notice to the Lender in accordance with Clause
12.1.2 above, the relevant Interest Period will be three months.
	 
	12.1.4.	 	Subject to this Clause 12 the Borrower may select an Interest Period of 1, 3 or 6 Months or
any other period agreed between the Borrower and the Lender.
	 
	12.1.5.	 	No Interest Period shall extend beyond the Termination Date.
	 
	12.1.6.	 	Each Interest Period shall start on the Closing Date or thereafter on the last day of its
preceding Interest Period.
	 
	12.2	 	Non-Business Days
	 
	 	 	If an Interest Period would otherwise end on a day which is not a Business Day, that
Interest Period will instead end on the next Business Day in that calendar month (if there
is one) or the preceding Business Day (if there is not).
	 
	13.	 	CHANGES TO THE CALCULATION OF INTEREST
	 
	13.1	 	Absence of quotations
	 
	 	 	Subject to Clause 13.2 (Market disruption), if EURIBOR is to be determined by reference to
the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time
on the Quotation Day, the applicable EURIBOR shall be determined on the basis of the
quotations of the remaining Reference Banks.
	 
	13.2	 	Market disruption
	 
	13.2.1.	 	If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then
the rate of interest on the Loan for the Interest Period shall be the percentage rate per
annum which is the sum of:

	 	(i)	 	the Margin;
	 
	 	(ii)	 	the rate notified to the Borrower by the Lender as soon as
practicable and in any event before interest is due to be paid in respect of
that Interest Period, to be that which expresses as a percentage rate per annum
the cost to the Lender of funding its participation in the Loan from whatever
source it may reasonably select; and
	 
	 	(iii)	 	the Mandatory Cost, if any, applicable to the Loan.

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	13.2.2.	 	In this Agreement “Market Disruption Event” means:

	 	(a)	 	at or about noon on the Quotation Day for the relevant Interest Period the
Screen Rate is not available and none or only one of the Reference Banks supplies a
rate to the Lender to determine EURIBOR for the relevant currency and Interest Period;
or
	 
	 	(b)	 	before close of business in Paris on the Quotation Day for the relevant
Interest Period, the Lender notifies the Borrower that the cost to it of obtaining
matching deposits in the European interbank market would be in excess of EURIBOR.

	13.3	 	Alternative basis of interest or funding
	 
	13.3.1.	 	If a Market Disruption Event occurs and the Lender or the Borrower so requires, the Lender
and the Borrower shall enter into negotiations (for a period of not more than thirty days)
with a view to agreeing a substitute basis for determining the rate of interest.
	 
	13.3.2.	 	Any alternative basis agreed pursuant to Clause 13.3.1 above shall be binding on all
Parties.
	 
	13.4	 	Break Costs
	 
	13.4.1.	 	The Borrower shall, within three Business Days of demand by the Lender, pay to the Lender
its Break Costs attributable to all or any part of the Loan or an Unpaid Sum being paid by the
Borrower on a day other than the last day of an Interest Period for the Loan or that Unpaid
Sum.
	 
	13.4.2.	 	The Lender shall, as soon as reasonably practicable after a demand by the Borrower, provide
a certificate confirming the amount of its Break Costs for any Interest Period in which they
accrue.
	 
	14.	 	FEES
	 
	 	 	The Borrower shall pay to the Lender on the Closing Date (as defined in the Pilot and Na
Pali Facilities Agreement) for the Senior Facilities, fees in the amounts agreed in the Fee
Letter.
	 
	15.	 	TAX GROSS UP AND INDEMNITIES
	 
	15.1	 	Tax gross-up
	 
	15.1.1.	 	Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a
Tax Deduction is required by law.
	 
	15.1.2.	 	The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction
(or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender
accordingly. Similarly, the Lender shall notify the Borrower and that Obligor on becoming so
aware in respect of a payment payable to the Lender.

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	15.1.3.	 	If a Tax Deduction is required by law to be made by an Obligor, the amount of the
payment due from the Borrower shall be increased to an amount which (after making any Tax
Deduction) leaves an amount equal to the payment which would have been due if no Tax
Deduction had been required.
	 
	15.1.4.	 	An Obligor is not required to make an increased payment under paragraph 15.1.3 above for a
Tax Deduction in respect of tax imposed by Luxembourg from a payment of interest on the Loan,
if on the date on which the payment falls due:

	 	(i)	 	the payment could have been made to the Lender without a Tax
Deduction if it was a Qualifying Lender, but on that date that Lender is not or
has ceased to be a Qualifying Lender other than as a result of any change after
the date it became a Lender under this Agreement in (or in the interpretation,
administration, or application of) any law, or any published practice or
concession of any relevant taxing authority; or
	 
	 	(ii)	 	the Lender is a Treaty Lender and the Obligor making the
payment is able to demonstrate that the payment could have been made to the
Lender without the Tax Deduction had that Lender complied with its obligations
under paragraph 15.1.7 below.

	15.1.5.	 	If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax
Deduction and any payment required in connection with that Tax Deduction within the time
allowed and in the minimum amount required by law.
	 
	15.1.6.	 	Within thirty days of making either a Tax Deduction or any payment required in connection
with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Lender
evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as
applicable) any appropriate payment paid to the relevant taxing authority.
	 
	15.1.7.	 	A Treaty Lender and each Obligor which makes a payment to which the Treaty Lender is
entitled shall co-operate in completing any procedural formalities necessary for that Obligor
to obtain authorization to make that payment without a Tax Deduction.
	 
	15.2	 	Tax indemnity
	 
	15.2.1.	 	The Borrower shall (within three Business Days of demand by the Lender) pay to the Lender
an amount equal to the loss, liability or cost which the Lender determines will be or has been
(directly or indirectly) suffered for or on account of Tax by the Lender in respect of a
Finance Document.
	 
	15.2.2.	 	Clause 15.2.1 above shall not apply:

	 	(a)	 	with respect to any Tax assessed on the Lender:

	 	(i)	 	under the law of the jurisdiction in which the Lender is
incorporated or, if different, the jurisdiction (or jurisdictions) in which the
Lender is treated as resident for tax purposes; or
	 
	 	(ii)	 	under the law of the jurisdiction in which the Lender’s
Facility Office

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	 	 	 	is located in respect of amounts received or receivable in that
jurisdiction,

	 	 	if that Tax is imposed on or calculated by reference to the net income received or
receivable (but not any sum deemed to be received or receivable) by the Lender; or

	 	(b)	 	to the extent a loss, liability or cost:

	 	(i)	 	is compensated for by an increased payment under Clause 15.1
(Tax gross-up); or
	 
	 	(ii)	 	would have been compensated for by an increased payment under
Clause 15.1 but was not so compensated solely because one of the exclusions in
paragraph 15.1.4 applied.

	15.2.3.	 	The Lender shall promptly notify the Borrower of any event which will give, or has given,
rise to a claim under Clause 15.2.1 above.
	 
	15.3	 	Tax Credit
	 
	 	 	If an Obligor makes a Tax Payment and the Lender determines (in is absolute discretion)
that:

	 	(a)	 	Credit is attributable to that Tax Payment; and
	 
	 	(b)	 	that Lender has obtained, utilized and retained that Tax Credit,

	 	 	the Lender shall pay an amount to the Obligor which the Lender determines will leave it
(after that payment) in the same after-Tax position as it would have been in had the Tax
Payment not been made by the Obligor.
	 
	15.4	 	Stamp taxes
	 
	 	 	The Borrower shall pay and, within three Business Days of demand, indemnify the Lender
against any cost, loss or liability the Lender incurs in relation to all stamp duty,
registration and other similar Taxes payable in respect of any Finance Document.
	 
	15.5	 	Value added tax
	 
	 	 	All amounts set out or expressed in a Finance Document to be payable by any Party to the
Lender which (in whole or in part) constitute the consideration for a supply or supplies for
VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply
or supplies, and accordingly, if VAT is or becomes chargeable on any supply made by the
Lender to any Party under a Finance Document, that Party shall pay to the Lender (in
addition to and at the same time as paying any other consideration for such supply) an
amount equal to the amount of such VAT (and the Lender shall promptly provide an appropriate
VAT invoice to such Party).

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	16.	 	INCREASED COSTS
	 
	16.1	 	Increased costs
	 
	16.1.1.	 	Subject to Clause 16.3 (Exceptions) the Borrower shall, within three Business Days of a
demand by the Lender, pay the amount of any Increased Costs incurred by the Lender or any of
its Affiliates as a result of (i) the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation or (ii) compliance
with any law or regulation made after the date of this Agreement.
	 
	16.1.2.	 	In this Agreement “Increased Costs” means:

	 	(a)	 	a reduction in the rate of return from the Loan or on the Lender’s (or its
Affiliate’s) overall capital;
	 
	 	(b)	 	an additional or increased cost; or
	 
	 	(c)	 	a reduction of any amount due and payable under any Finance Document,

	 	 	which is incurred or suffered by the Lender or any of its Affiliates to the extent that it
is attributable to the Lender having entered into its Commitment or funding or performing
its obligations under any Finance Document.
	 
	16.2	 	Increased cost claims
	 
	16.2.1.	 	The Lender shall promptly notify the Borrower of the event giving rise to any claim
pursuant to Clause 16.1 (Increased costs).
	 
	16.2.2.	 	The Lender shall, as soon as practicable after a demand by the Borrower, provide a
certificate confirming the amount of its Increased Costs.
	 
	16.3	 	Exceptions
	 
	16.3.1.	 	Clause 16.1 (Increased costs) does not apply to the extent any Increased Cost is:

	 	(a)	 	attributable to a Tax Deduction required by law to be made by an Obligor;
	 
	 	(b)	 	compensated for by Clause 15.2 (Tax indemnity) (or would have been compensated
for under Clause 15.2 (Tax indemnity) but was not so compensated solely because any of
the exclusions in Clause 15.2.2 applied);
	 
	 	(c)	 	compensated for by the payment of the Mandatory Cost; or
	 
	 	(d)	 	attributable to the willful breach by the Lender or its Affiliates of any law
or regulation.

	17.	 	OTHER INDEMNITIES
	 
	17.1	 	Currency indemnity
	 
	17.1.1.	 	If any sum due from the Borrower under the Finance Documents (a “Sum”), or any order,
judgment or award given or made in relation to a Sum, has to be converted from the currency
(the “First Currency”) in which that Sum is payable into another currency (the “Second
Currency”) for the purpose of:

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	 	(a)	 	making or filing a claim or proof against the Borrower;
	 
	 	(b)	 	obtaining or enforcing an order, judgment or award in relation to any
litigation or arbitration proceedings,

	 	 	the Borrower shall as an independent obligation within three Business Days of demand,
indemnify to the extent permitted by law the Lender against any cost, loss or liability
arising out of or as a result of the conversion including any discrepancy between (A) the
rate of exchange used to convert that Sum from the First Currency into the Second Currency
and (B) the rate or rates of exchange available to the Lender at the time of its receipt of
that Sum.
	 
	17.1.2.	 	The Borrower waives any right it may have in any jurisdiction to pay any amount under the
Finance Documents in a currency or currency unit other than that in which it is expressed to
be payable.
	 
	17.2	 	Other indemnities
	 
	 	 	The Borrower shall (or shall procure that an Obligor will), within three Business Days of
demand, indemnify the Lender against any cost, loss or liability incurred by the Lender as a
result of:

	 	(a)	 	the occurrence of any Event of Default;
	 
	 	(b)	 	investigating any event which it reasonably believes is a Default;
	 
	 	(c)	 	acting or relying on any notice, request or instruction which it reasonably
believes to be genuine, correct and appropriately authorized;
	 
	 	(d)	 	a failure by an Obligor to pay any amount due under a Finance Document on its
due date;
	 
	 	(e)	 	funding, or making arrangements to fund, its participation in the Loan
requested by the Borrower in a Utilization Request but not made by reason of the
operation of any one or more of the provisions of this Agreement (other than by reason
of default or negligence by the Lender alone); or
	 
	 	(f)	 	the Loan (or part of the Loan) not being prepaid in accordance with a notice of
prepayment given by the Borrower.

	18.	 	MITIGATION BY THE LENDER
	 
	18.1	 	Mitigation
	 
	18.1.1.	 	The Lender shall, in consultation with the Borrower, take all reasonable steps to mitigate
any circumstances which arise and which would result in any amount becoming payable under or
pursuant to, or cancelled pursuant to, any of Clause 8.1 (Illegality), 15 (Tax Gross Up and
Indemnities) or 16 (Increased Costs) including (but not limited to) transferring its rights
and obligations under the Finance Documents to another Affiliate or Facility Office.
	 
	18.1.2.	 	Clause 18.1.1 above does not in any way limit the obligations of any Obligor under
the Finance Documents.

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	18.2	 	Limitation of liability
	 
	18.2.1.	 	The Borrower shall promptly indemnify the Lender for all costs and expenses reasonably
incurred by the Lender as a result of steps taken by it under Clause 18.1 (Mitigation).
	 
	18.2.2.	 	The Lender is not obliged to take any steps under Clause 18.1 (Mitigation) if, in the
opinion of the Lender (acting reasonably), to do so might be prejudicial to it.
	 
	19.	 	COSTS AND EXPENSES
	 
	19.1	 	Transaction expenses
	 
	 	 	The Borrower shall promptly on demand pay the Lender the amount of all costs and expenses
(including legal fees) reasonably incurred by it in connection with the negotiation,
preparation, printing and execution of:

	 	(a)	 	this Agreement and any other documents referred to in this Agreement; and
	 
	 	(b)	 	any other Finance Documents executed after the date of this Agreement.

	19.2	 	Amendment costs
	 
	 	 	If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required
pursuant to Clause 25.6 (Change of currency), the Borrower shall, within three Business Days
of demand, reimburse the Lender for the amount of all costs and expenses (including legal
fees) reasonably incurred by the Lender in responding to, evaluating, negotiating or
complying with that request or requirement.
	 
	19.3	 	Enforcement and preservation costs
	 
	 	 	The Borrower shall, within three Business Days of demand, pay to the Lender the amount of
all costs and expenses (including legal fees) incurred by the Lender in connection with the
enforcement of, or the preservation of any rights under, any Finance Document.
	 
	20.	 	REPRESENTATIONS
	 
	 	 	Each Obligor makes the representations and warranties set out in this Clause 20 to the
Lender on the date of this Agreement, provided that Quiksilver, Inc. shall not make
for itself the representations and warranties set out in Clauses 20.6 (No default), 20.8 (No
misleading information) and 20.11 (Material Trademarks) and provided further that
Quiksilver, Inc. shall not make the representations and warranties set out in Clause 20.12
(No proceedings pending or threatened).
	 
	20.1	 	Status
	 
	20.1.1.	 	It is a company with limited liability, duly organized and validly existing under the law
of its jurisdiction of organization.

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	20.1.2.	 	It and each of its Subsidiaries which is a member of the European Group has the power to
own its assets and carry on its business as it is being conducted.
	 
	20.2	 	Binding obligations
	 
	20.2.1.	 	The obligations expressed to be assumed by it in each Finance Document to which it is a
party are, subject to any matters which are set out as qualifications or reservations as to
matters of law of general application in any legal opinion delivered pursuant to Clause 5
(Conditions of Utilization), legal, valid, binding and enforceable obligations.
	 
	20.2.2.	 	(without limiting the generality of Clause 20.2.1 above), subject to any matters which are
set out as qualifications or reservations as to matters of law of general application in any
legal opinion delivered pursuant to Clause 5 (Conditions of Utilization), each Transaction
Security Document to which it is a party creates the security interests which the Transaction
Security Document purports to create and those security interests are valid and effective.
	 
	20.3	 	Non-conflict with other obligations
	 
	 	 	The entry into and performance by it of, and the transactions contemplated by, the Finance
Documents do not and will not conflict with:

	 	(a)	 	any law or regulation applicable to it;
	 
	 	(b)	 	its or any of its Subsidiaries’ constitutional documents; or
	 
	 	(c)	 	any agreement (including for the avoidance of doubt the 2009 ABL Agreement, the
Senior Notes, the Pilot and Na Pali Facilities Agreement and the Rhône Financing
Documents) or instrument binding upon it or any of its Subsidiaries or any of its or
any of its Subsidiaries’ assets.

	20.4	 	Power and authority
	 
	 	 	It has the power to enter into, perform and deliver, and has taken, or will have taken prior
to the relevant time, all necessary action to authorize its entry into, performance and
delivery of, the Finance Documents to which it is a party and the transactions contemplated
by those Finance Documents.
	 
	20.5	 	Validity and admissibility in evidence
	 
	 	 	All Authorizations required or desirable:
	 
	20.5.1.	 	to enable it lawfully to enter into, exercise its rights and comply with its obligations in
the Finance Documents to which it is a party; and
	 
	20.5.2.	 	to make the Finance Documents to which it is a party admissible in evidence in its
jurisdiction of incorporation (other than registration with the Administration de
l’Enregistrement et des Domaines of the Grand Duchy of Luxembourg).
	 
	 	 	have been obtained or effected and are in full force and effect.

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	20.6	 	No Insolvency
	 
	 	 	No:
	 
	20.6.1.	 	corporate action, legal proceeding or other procedure or step described in Clause 23.5
(Insolvency), 23.6 (Insolvency of Quiksilver, Inc. or Quiksilver Europa) and paragraph (a) of
23.7 (Insolvency proceedings); or
	 
	20.6.2.	 	creditors’ process described in Clause 23.8 (Creditors’ process),
	 
	 	 	has been taken or, to the knowledge of any Obligor, threatened (in writing) in relation to
Pilot or any of its Subsidiaries or the relevant Obligor; and none of the circumstances
described in Clause 23.5 (Insolvency) applies to Pilot or any of its Subsidiaries or an
Obligor

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	20.7	 	No default
	 
	20.7.1.	 	No Event of Default (other than on the Senior Facilities Closing Date only, any Event of
Default arising pursuant to Clause 23.10 (Material adverse change)) and, on the date of this
Agreement, no Default (other than on the Senior Facilities Closing Date only, any Default
arising pursuant to Clause 23.10 (Material adverse change)) is continuing or is reasonably
likely to result from the making of the Utilization.
	 
	20.7.2.	 	On the Closing Date, no Major Default is continuing or is reasonably likely to result from
the making of the Utilization.
	 
	20.7.3.	 	No other event or circumstance is outstanding which constitutes (or, with the expiry of a
grace period, the giving of notice, the making of any determination or any combination of any
of the foregoing, would constitute) a default or termination event (however described) under
any other agreement or instrument which is binding on it or any of its Subsidiaries or to
which its (or any of its Subsidiaries’) assets are subject which has or is reasonably likely
to have a Material Adverse Effect.
	 
	20.8	 	No misleading information
	 
	20.8.1.	 	Any factual information provided by any member of the Group in connection with the Loan was
true and accurate in all material respects as at the date it was provided or as at the date
(if any) on which the information was expressed to be given.
	 
	20.8.2.	 	No information has been given or withheld that results in the information described in
Clause 20.8.1 being untrue or misleading in any material respect.
	 
	20.9	 	Material adverse change
	 
	20.9.1.	 	There has been no material adverse change in the business or financial condition of the
Borrower, Biarritz Holdings or the Pilot Group since 31 October 2008, other than the changes
reflected in the Information Package (as defined in the Pilot and Na Pali Facilities
Agreement) disclosed to the Lender as of the date of this Agreement.
	 
	20.9.2.	 	Since the date of the most recent financial statements delivered pursuant to Clause 21.1
(Financial statements) there has been no material adverse change in the business, assets or
financial condition of the Borrower, Biarritz Holdings or the Pilot Group.
	 
	20.10	 	Ranking
	 
	20.10.1.	 	Any unsecured and unsubordinated claims of the Lender against it under the Finance
Documents rank at least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except those creditors whose claims are mandatorily preferred by
laws of general application to companies.
	 
	20.10.2.	 	The Transaction Security has or will have first ranking priority and it is not subject to
any prior ranking or pari passu ranking Security.
	 
	20.11	 	Material Trademarks
	 
	 	 	The revenue generated by products bearing the Material Trademarks represents at least 80% of
the consolidated revenue of Pilot and its Subsidiaries (excluding

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	 	 	revenues from the DC Shoes Business) for the most recently closed six-month period for which
financial information is available and such Material Trademarks constitute all of the marks
and trademarks which are necessary, useful and sufficient to generate such revenue.
	 
	20.12	 	No proceedings pending or threatened
	 
	 	 	No litigation, arbitration or administrative proceedings of or before any court, arbitral
body or agency which, if adversely determined, are reasonably likely to have a Material
Adverse Effect have (to the best of its knowledge and belief) been started or threatened in
writing against it or any of its Subsidiaries which is a member of the European Group.
	 
	20.13	 	Investment Company Act
	 
	 	 	Neither Quiksilver, Inc. nor any of its Subsidiaries is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
	 
	20.14	 	Carried Forward Tax Losses
	 
	 	 	Pilot and its Subsidiaries’ tax losses to be carried forward as of 31 October 2008 is equal
to at least €210,000,000 (such minimum amount, the “Carried Forward Tax Losses”).
	 
	20.15	 	J.P. Morgan Guarantee
	 
	 	 	The maximum aggregate amount of the payment obligations of Na Pali under the €35,600,000
bank guarantee issued on 14 September 2007 by J.P. Morgan Europe Limited, London Branch, in
favor of the Rossignol Vendors (as defined in the Pilot and Na Pali Facilities Agreement)
and that certain Issuance and Reimbursement Agreement dated 14 September 2007 between Na
Pali as applicant and J.P. Morgan Europe Limited as issuing bank shall not exceed
€35,600,000 at any time during the life of the Loan.

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	20.16	 	Repetition
	 
	20.16.1.	 	The Repeating Representations are deemed to be made by each Obligor by reference to the
facts and circumstances then existing on the first day of each Interest Period, and the
representations and warranties set out in Clause 20.11 (Material Trademarks) are deemed to be
made on, and be reference to the facts and circumstances existing on, the last day of each
Financial Semester (as such term is defined in the Pilot and Na Pali Facilities Agreement).
	 
	20.16.2.	 	The representations and warranties set out in Clause 20.6 (No Insolvency), paragraph
20.7.2 of Clause 20.7 (No default) and Clause 20.10 (Ranking) are also deemed to be made by
each Obligor by reference to the facts and circumstances then existing on the date of the
Utilization Request.
	 
	21.	 	INFORMATION UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 21 remain in force from the date of this Agreement for so
long as any amount is outstanding under the Finance Documents or the Commitment is in force.
	 
	21.1	 	Financial statements
	 
	 	 	The Borrower shall supply to the Lender as soon as they are available, but in any event
within 90 days after the end of each of its financial years and within 90 days after the end
of each of the financial years of Biarritz Holdings, the unaudited and unconsolidated
financial statements of each of the Borrower and Biarritz Holdings for that financial year.

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	21.2	 	Requirements as to financial statements
	 
	21.2.1.	 	The Borrower shall procure that each set of financial statements delivered pursuant to this
Clause 21 includes a balance sheet, profit and loss account and cashflow statement.
	 
	21.2.2.	 	Each set of financial statements delivered pursuant to Clause 21:

	 	(a)	 	shall be certified by a legal representative of the relevant company as fairly
representing its financial condition and operations as at the date as at which those
financial statements were drawn up; and
	 
	 	(b)	 	shall be prepared using generally accepted accounting principles as in effect
in France or Luxembourg (as applicable).

	21.3	 	Information: miscellaneous
	 
	21.3.1.	 	The Borrower shall supply to the Lender:

	 	(a)	 	all documents dispatched by the Borrower to its creditors generally at the same
time as they are dispatched;
	 
	 	(b)	 	all documents dispatched to the lenders under the Pilot and Na Pali Facilities
Agreement at the same time as they are dispatched;
	 
	 	(c)	 	prior to the effectiveness of any amendments and waivers relating to the Pilot
and Na Pali Facilities Agreement, copies thereof in their substantially final form;
	 
	 	(d)	 	promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are current, threatened in writing or
pending against the Borrower, Biarritz Holdings or any member of the Pilot Group, and
which, if adversely determined, are reasonably likely to have a Material Adverse Effect
or which would involve a liability of a potential or alleged liability, exceeding
€2,000,000 (or its equivalent in other currencies); and
	 
	 	(e)	 	promptly on request, such further information regarding the financial
condition, business and operations of any member of the Pilot Group as the Lender may
reasonably request.

	21.4	 	Notification of default
	 
	21.4.1.	 	Each Obligor shall notify the Lender of any Default (and the steps, if any, being taken to
remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a
notification has already been provided by another Obligor).
	 
	21.4.2.	 	Promptly upon a request by the Lender, the Borrower shall supply to the Lender a
certificate signed by its legal representative on its behalf certifying that no Default is
continuing (or if a Default is continuing, specifying the Default and the steps, if any, being
taken to remedy it).

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	21.5	 	“Know your customer” checks
	 
	 	 	If:

	 	(a)	 	the introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this Agreement;
	 
	 	(b)	 	any change in the status of an Obligor after the date of this Agreement; or
	 
	 	(c)	 	a proposed assignment or transfer by the Lender of any of its rights and
obligations under this Agreement,

	 	 	obliges the Lender (or, in the case of paragraph (c) above, any prospective new Lender) to
comply with “know your customer” or similar identification procedures in circumstances where
the necessary information is not already available to it, each Obligor shall promptly upon
the request of the Lender supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Lender (for itself or, in the case of the event
described in paragraph (c) above, on behalf of any prospective new Lender) in order for the
Lender or, in the case of the event described in paragraph (c) above, any prospective new
Lender to carry out and be satisfied it has complied with all necessary “know your customer”
or other similar checks under all applicable laws and regulations pursuant to the
transactions contemplated in the Finance Documents.
	 
	22.	 	GENERAL UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 22 remain in force from the date of this Agreement for so
long as any amount is outstanding under the Finance Documents or the Commitment is in force.
	 
	22.1	 	Authorizations
	 
	 	 	Each Obligor shall promptly:

	 	(a)	 	obtain, comply with and do all that is necessary to maintain in full force and
effect; and
	 
	 	(b)	 	supply certified copies to the Lender of,

	 	 	any Authorization required under any law or regulation of its jurisdiction of incorporation
to enable it to perform its obligations under the Finance Documents to which it is a party
and to ensure the legality, validity, enforceability or admissibility in evidence in its
jurisdiction of incorporation of any Finance Document to which it is a party.
	 
	22.2	 	Compliance with laws
	 
	 	 	Each of Biarritz Holdings and the Borrower shall (and each Obligor shall procure that each
of its Subsidiaries will) comply in all respects with all laws to which it may be subject,
if failure so to comply has or is reasonably likely to have a Material Adverse Effect.

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	22.3	 	Negative pledge
	 
	 	 	In this Clause 22.3, “Quasi-Security” means an arrangement or transaction described in
paragraph (b) below.

	 	(a)	 	Neither the Borrower nor Biarritz Holdings (and the Borrower and Biarritz
Holdings shall procure that none of their subsidiaries) shall create or permit to
subsist any Security over any of its assets.
	 
	 	(b)	 	Neither the Borrower nor Biarritz Holdings (and the Borrower and Biarritz
Holdings shall procure that none of their subsidiaries) shall:

	 	(i)	 	sell, transfer or otherwise dispose of any of its assets on
terms whereby they are or may be leased to or re-acquired by an Obligor or any
other member of the Group;
	 
	 	(ii)	 	sell, transfer or otherwise dispose of any of its receivables
on recourse terms;
	 
	 	(iii)	 	enter into any arrangement under which money or the benefit of
a bank or other account may be applied, set-off or made subject to a
combination of accounts; or
	 
	 	(iv)	 	enter into any other preferential arrangement having a similar
effect,

	 	 	 	in circumstances where the arrangement or transaction is entered into primarily as a
method of raising Financial Indebtedness or of financing the acquisition of an
asset.
	 
	 	(c)	 	Paragraphs (a) and (b) above do not apply to any Security or (as the case may
be) Quasi-Security, which is Permitted Security.

	22.4	 	Disposals
	 
	 	 	Neither the Borrower nor Biarritz Holdings shall enter into a single transaction or a series
of transactions (whether related or not) and whether voluntary or involuntary to sell,
lease, transfer or otherwise dispose of any asset other than a sale, lease, transfer or
other disposal which is a Permitted Disposal.

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	22.5	 	Merger
	 
	22.5.1.	 	No Obligor (other than Quiksilver, Inc.) shall (and each Obligor shall procure that no
Subsidiary of Biarritz Holdings shall) enter into any amalgamation, demerger, merger or
corporate reconstruction other than:

	 	(a)	 	the solvent liquidation or reorganization of any Subsidiary of Biarritz
Holdings (other than the Borrower) so long as any payments or assets distributed as a
result of such liquidation or reorganization are distributed to Biarritz Holdings or
any of its Subsidiaries; and
	 
	 	(b)	 	any transactions contemplated by the Structure Memorandum.

	22.5.2.	 	Quiksilver, Inc. shall not enter into any amalgamation, demerger, merger, consolidation or
corporate reconstruction other than a merger pursuant to which Quiksilver, Inc. will be the
surviving entity and which will not result in a Change of Control.
	 
	22.6	 	Change of business
	 
	 	 	Each Obligor (other than Quiksilver, Inc.) shall (and each Obligor shall procure that each
Subsidiary of Biarritz Holdings shall) procure that no substantial change is made to the
general nature of its business or (with respect to Pilot and its Subsidiaries) of the
business of Pilot and its Subsidiaries taken as a whole from that carried on at the date of
this Agreement.
	 
	22.7	 	Miscellaneous
	 
	22.7.1.	 	Biarritz Holdings undertakes not to distribute to Quiksilver, Inc. (or any Subsidiary
thereof (other than Biarritz Holdings and its Subsidiaries) (and Quiksilver, Inc. undertakes
not to (i) take any action for the purpose of making such distribution or (ii) accept the
benefit of such distribution) in any manner whatsoever (including through dividend
distributions or reimbursement of shareholder loans) the royalties or any other amount of any
nature whatsoever received by it from Biarritz Holdings and its Subsidiaries with respect to
the licenses on the trademarks owned by it.
	 
	22.7.2.	 	Each Obligor shall (and each Obligor shall procure that each of its Subsidiaries will) take
all corporate actions required by law to ratify the execution by it of any of the Finance
Documents.
	 
	22.7.3.	 	Biarritz Holdings shall not (and Quiksilver, Inc. shall procure that QSH, Biarritz Holdings
and Na Pali and its Subsidiaries shall not) rescind, amend, supplement or otherwise modify any
of the License Agreements (as defined in the Pilot and Na Pali Facilities Agreement) without
the prior consent of the Lender.
	 
	22.8	 	Intellectual Property
	 
	 	 	The Borrower shall deliver to the Lender at the same time as the delivery of the Business
Plan pursuant to clause 23.4 (Business Plan) of the Pilot and Na Pali Facilities Agreement
(and as defined therein) (and at such other times in the Borrower’s discretion) a certified
update of the list of the trademarks delivered by it pursuant to Part I (Conditions
Precedent to Signing) of Schedule 1 (Conditions

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	 	 	Precedent) so that the representation set forth in Clause 20.11 (Material Trademarks) is
correct at such time.
	 
	22.9	 	Further Assurance
	 
	22.9.1.	 	Each Obligor shall (and each Obligor shall procure that each of its Subsidiaries will)
promptly do all such acts or execute all such documents (including assignments, transfers,
mortgages, charges, notices and instructions) as the Security Agent may reasonably specify
(and in such form as the Lender may reasonably require in favor of the Security Agent or its
nominee(s)):

	 	(a)	 	to perfect the Security created or intended to be created under or evidenced by
the Transaction Security Document (which may include the execution of a mortgage,
charge, assignment or other Security over all or any of the assets which are, or are
intended to be, the subject of the Transaction Security) or for the exercise of any
rights, powers and remedies of the Security Agent or the Lender provided by or pursuant
to the Finance Documents or by law;
	 
	 	(b)	 	to confer on the Security Agent or confer on the Lender, Security over any
property and assets of that Obligor located in any jurisdiction equivalent or similar
to the Security intended to be conferred by or pursuant to the Transaction Security
Document (including, without limitation, any new trademarks disclosed to the Lender
pursuant to Clause 22.8 (Intellectual Property)); and/or
	 
	 	(c)	 	to facilitate the realization of the assets which are, or are intended to be,
the subject of the Transaction Security.

	22.9.2.	 	Each Obligor shall (and each Obligor shall procure that each of its Subsidiaries will) take
all such action as is available to it (including making all filings and registrations) as may
be necessary for the purpose of the creation, perfection, protection or maintenance of any
Security conferred or intended to be conferred on the Security Agent or the Lender by or
pursuant to the Finance Documents.
	 
	22.10	 	Post-closing conditions
	 
	22.10.1.	 	The Borrower shall (x) within two months of the Closing Date enter into Hedging Agreements
that cover a period of not less than the two year period following the Closing Date and are in
respect of not less than 70% of the Loan from time to time and (y) maintain such Hedging
Agreements until the earlier of the 2nd anniversary of the Closing Date and the date on which
the Commitment has terminated and the Loan and all other amounts outstanding pursuant to the
Finance Documents have been repaid in full.
	 
	22.10.2.	 	The Obligors shall on the Closing Date deliver all of the documents and other evidence
listed in Part II of Schedule 1 (Post-Closing Conditions) in form and substance satisfactory
to the Lender.
	 
	22.11	 	Subordinated Debt

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	22.11.1.	 	Except as permitted under Clause 22.11.2 below, no Obligor other than Quiksilver, Inc.
shall (and each Obligor shall procure that none of its Subsidiaries will):

	 	(a)	 	repay or prepay any principal amount (or capitalized interest) outstanding
under the Subordinated Debt;
	 
	 	(b)	 	pay any interest or any other amounts payable in connection with the
Subordinated Debt; or
	 
	 	(c)	 	purchase, redeem, defease or discharge any amount outstanding with respect to
Subordinated Debt.

	22.11.2.	 	Clause 22.11.1 does not apply to a payment, repayment, prepayment, purchase, redemption,
defeasance or discharge which is permitted under the Subordination Agreement.
	 
	22.12	 	Pari passu ranking
	 
	 	 	Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of the
Lender and the Security Agent under the Finance Documents rank at least pari passu with the
claims of all its other unsecured and unsubordinated creditors except those creditors who
are mandatorily preferred by laws of general application to companies.
	 
	23.	 	EVENTS OF DEFAULT
	 
	 	 	Each of the events or circumstances set out in this Clause 23 is an Event of Default (save
for Clause 23.12 (Acceleration)).
	 
	23.1	 	Non-payment
	 
	 	 	An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at
the place and in the currency in which it is expressed to be payable unless:

	 	(a)	 	its failure to pay is caused by:

	 	(i)	 	administrative or technical error; or
	 
	 	(ii)	 	a Disruption Event; and

	 	(b)	 	payment is made within 3 Business Days of its due date.

	23.2	 	Other obligations

	 	(a)	 	An Obligor does not comply with any provision of the Finance Documents (other
than those referred to in Clause 23.1 (Non-payment)).
	 
	 	(b)	 	No Event of Default under paragraph (a) above will occur if the failure to
comply is capable of remedy and is remedied within 15 Business Days of the earlier of
(A) the Lender giving notice to the Borrower and (B) the Borrower
becoming aware of the failure to comply.

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	23.3	 	Misrepresentation
	 
	 	 	Any representation or statement made or deemed to be made by an Obligor in the Finance
Documents or any other document delivered by or on behalf of any Obligor under or in
connection with any Finance Document is or proves to have been incorrect or misleading in
any material respect when made or deemed to be made, unless the failure to comply is capable
of remedy and is remedied within 15 Business Days of the earlier of (i) the Lender giving
notice to the Borrower or (ii) the Borrower becoming aware of the misrepresentation.
	 
	23.4	 	Cross default

	 	(a)	 	Any Financial Indebtedness (including for the avoidance of doubt any Financial
Indebtedness under the Senior Facilities, the 2009 ABL Agreement, the Rhône Financing
Documents, the Senior Notes or the SG Bonds) of any of the Obligors or any Material
Subsidiary is not paid when due nor within any originally applicable grace period,
provided that in the case of any Financial Indebtedness under the Rhône Financing
Documents, such Financial Indebtedness has not been paid within the seven-day period
following its due date or the last day of any originally applicable grace period (as
the case may be).
	 
	 	(b)	 	Any Financial Indebtedness (including for the avoidance of doubt any Financial
Indebtedness under the Senior Facilities, the 2009 ABL Agreement, the Rhône Financing
Documents, the Senior Notes or the SG Bonds) of any of the Obligors or any Material
Subsidiary is declared to be or otherwise becomes due and payable prior to its
specified maturity as a result of an event of default (however described).
	 
	 	(c)	 	Any commitment for any Financial Indebtedness (including for the avoidance of
doubt any Financial Indebtedness under the Senior Facilities, the 2009 ABL Agreement,
the Rhône Financing Documents, the Senior Notes or the SG Bonds) of any of the Obligors
or any Material Subsidiary is cancelled or suspended by a creditor of any of the
Obligors or any Material Subsidiary as a result of an event of default (however
described).
	 
	 	(d)	 	Any creditor of any of the Obligors or any Material Subsidiary becomes entitled
to declare any Financial Indebtedness (including for the avoidance of doubt any
Financial Indebtedness under the Senior Facilities, the 2009 ABL Agreement, the Rhône
Financing Documents, the Senior Notes or the SG Bonds) of any of the Obligors or any
Material Subsidiary due and payable prior to its specified maturity as a result of an
event of default (however described), provided that in the case of events of default
(however described) (other than payment defaults), such events of default have remained
unremedied and not waived for a period of 30 days following the relevant date on which
they occurred.
	 
	 	(e)	 	With respect to (i) the Financial Indebtedness of Pilot or any of its
Subsidiaries, no Event of Default will occur under this Clause 23.4 unless (x)

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	 	 	 	the aggregate amount of Financial Indebtedness or commitment for Financial
Indebtedness falling within paragraphs (a) to (d) above is €500,000 (or its
equivalent in any other currency or currencies) or more or (y) the Financial
Indebtedness falling within such paragraphs (a) through (d) is Financial
Indebtedness under the Senior Facilities, and (ii) the Financial Indebtedness of
Quiksilver, Inc. and Quiksilver Americas, Inc., no Event of Default will occur under
this Clause 23.4 unless (x) the aggregate amount of Financial Indebtedness or
commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is
€5,000,000 (or its equivalent in any other currency or currencies) or more or (y)
the Financial Indebtedness falling within such paragraphs (a) through (d) is
Financial Indebtedness under the Senior Facilities.

	23.5	 	Insolvency

	 	(a)	 	An Obligor (other than Quiksilver, Inc.) or a Material Subsidiary is unable or
admits inability to pay its debts as they fall due, or is deemed to or declared to be
unable to pay its debts under applicable law, suspends or threatens (in writing) to
suspend making payments on any of its debts or, by reason of actual or anticipated
financial difficulties, commences negotiations with one or more of its creditors (other
than the Lenders generally with respect to the Facilities) with a view to rescheduling
any of its indebtedness other than with respect to the commercial receivables referred
to in paragraph (b)(ii) of clause 26.5 (Cross default) of the Pilot and Na Pali
Facilities Agreement.
	 
	 	(b)	 	An Obligor (other than Quiksilver, Inc.) or a Material Subsidiary which
conducts business in France is in a state of cessation des paiements, or becomes
insolvent for the purpose of any insolvency law.
	 
	 	(c)	 	A moratorium is declared in respect of any indebtedness of any Obligor (other
than Quiksilver, Inc.) or any Material Subsidiary. If a moratorium occurs, the ending
of the moratorium will not remedy any Event of Default caused by that moratorium.

	23.6	 	Insolvency of Quiksilver, Inc. or Quiksilver Europa

	 	(a)	 	Quiksilver, Inc. institutes or consents to the institution of any proceeding
under any Debtor Relief Law, or makes an assignment for the benefit of creditors;
	 
	 	(b)	 	Quiksilver, Inc. applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or
for all or any material part of its property;
	 
	 	(c)	 	any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is otherwise appointed in respect of Quiksilver, Inc. and the
appointment continues undischarged, undismissed or unstayed for sixty (60) calendar
days;
	 
	 	(d)	 	any proceeding under any Debtor Relief Law relating to Quiksilver, Inc. or to
all or any material part of its property is instituted without the consent of

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	 	 	 	Quiksilver, Inc. and continues undismissed or unstayed for sixty (60) calendar days,
or an order for relief is entered in any such proceeding;
	 
	 	(e)	 	any actions are taken by Quiksilver Europa or by any third party for the
declaration of insolvency (“concurso”) of Quiksilver Europa; or
	 
	 	(f)	 	any action is taken by Quiksilver Europa to obtain the protection in any
pre-insolvency scenarios granted by article 5.3 of Spanish Insolvency Law as drafted by
RDL 3/2009.

	23.7	 	Insolvency proceedings

	 	(a)	 	Any corporate action, legal proceedings or other procedure (other than any such
actions, proceeding or procedure relating to the conciliation proceeding outstanding on
the date of this Agreement) or step is taken in relation to:

	 	(i)	 	the suspension of payments, a moratorium of any indebtedness,
dissolution, administration or reorganization (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any Obligor or Material Subsidiary other
than a solvent liquidation or reorganization of any Material Subsidiary which
is not an Obligor;
	 
	 	(ii)	 	a composition, compromise, assignment or arrangement with any
creditor of any Obligor or Material Subsidiary (other than any commercial
arrangement of any member of the Group referred to in paragraph (b)(ii) of
clause 26.5 (Cross default) of the Pilot and Na Pali Facilities Agreement
(subject to the conditions provided therein);
	 
	 	(iii)	 	the appointment of a liquidator (other than in respect of a
solvent liquidation of a Material Subsidiary which is not an Obligor) receiver,
administrator, administrative receiver, compulsory manager or other similar
officer in respect of any Obligor or Material Subsidiary or any of its assets;
	 
	 	(iv)	 	enforcement of any Security over any assets of any Obligor or
Material Subsidiary,
	 
	 	(v)	 	or any analogous procedure or step is taken in any
jurisdiction.

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	 	(b)	 	An Obligor or a Material Subsidiary commences proceedings for conciliation in
accordance with articles L.611-4 to L.611-15 of the French Code de Commerce (not
including, for the avoidance of doubt the conciliation proceeding outstanding on the
date of this Agreement).
	 
	 	(c)	 	A judgment for sauvegarde, redressement judiciaire or liquidation judiciaire or
for cession totale ou partielle de l’entreprise is entered in relation to an Obligor or
a Material Subsidiary under articles L.620-1 to L.670-8 of the French Code de Commerce.

	23.8	 	Creditors’ process
	 
	 	 	Any of the enforcement proceedings provided for in French law n° 91-650 of 9 July 1991, or
any expropriation, attachment, sequestration, distress or execution or any analogous process
in any jurisdiction affects any asset or assets of (i) the Borrower, Biarritz Holdings or
any Material Subsidiary having an aggregate value of €5,000,000 or more or (ii) Quiksilver,
Inc. having an aggregate value of €5,000,000 or more, and in each case is not discharged
within 15 days.
	 
	23.9	 	Unlawfulness
	 
	 	 	Except as provided in Clause 8.1 (Illegality), it is or becomes unlawful for an Obligor to
perform any of its obligations under the Finance Documents.
	 
	23.10	 	Material adverse change
	 
	 	 	Any event or circumstance occurs which the Lender reasonably believes has or is reasonably
likely to have a Material Adverse Effect.
	 
	23.11	 	Carried Forward Tax Losses
	 
	 	 	Pilot loses the ability to use a portion of the Carried Forward Tax Losses due to a change
of activity or a final reassessment by the French tax authorities, and in the case of tax
reassessments such reassessment shows tax loss carryforwards at 31 October 2008 of less than
the Carried Forward Tax Losses.

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	23.12	 	Acceleration
	 
	23.12.1.	 	On and at any time after the occurrence of an Event of Default which is continuing the
Lender may without mise en demeure or any other judicial or extra judicial step by notice to
the Borrower but subject to the mandatory provisions of articles L.620 1 to L.670-8 of the
French Code de Commerce (and provided that such notice shall not be required to be given to
Quiksilver, Inc. upon the occurrence of an Event of Default under Clause 23.6 (Insolvency of
Quiksilver, Inc. or Quiksilver Europa):

	 	(a)	 	cancel the Commitment whereupon it shall immediately be cancelled;
	 
	 	(b)	 	declare that all or part of the Loan, together with accrued interest, and all
other amounts accrued or outstanding under the Finance Documents be immediately due and
payable, whereupon they shall become immediately due and payable; and/or
	 
	 	(c)	 	exercise or direct the Security Agent to exercise any or all of its rights,
remedies, powers or discretions under the Finance Documents.

	23.12.2.	 	During the period commencing on the date hereof and ending on the Closing Date, the Lender
shall not be entitled to:

	 	(a)	 	cancel its Commitment to the extent to do so would prevent or limit the making
of the Utilization;
	 
	 	(b)	 	rescind, terminate, cancel, accelerate or cause repayment or prepayment of any
amounts outstanding under this Agreement or the Loan or exercise any similar right or
remedy or make or enforce any claim under the Finance Documents it may have to the
extent to do so would prevent or limit the making of the Utilization;
	 
	 	(c)	 	refuse to make the Utilization; or
	 
	 	(d)	 	exercise any right of set-off or counterclaim in respect of the Utilization to
the extent to do so would prevent or limit the making of the Utilization,
	 
	 	 	 	in each case, solely on the basis of a Major Default or as a result of any of the
representations and warranties set forth in this Agreement (other than the
representations and warranties set forth in Clause 20.6 (No Insolvency), paragraph
20.7.2 of Clause 20.7 (No default) or Clause 20.10 (Ranking)) not being true or
correct; provided that, immediately after the Closing Date all such rights,
remedies and entitlements shall be available to the Lender notwithstanding that they
may not have been used or been available for use on the Closing Date

	24.	 	ASSIGNMENTS AND TRANSFERS BY THE LENDER
	 
	24.1	 	Assignments and transfers by the Lender
	 
	 	 	Subject to this Clause 24, the Lender (the “Existing Lender”) may:

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	 	(a)	 	assign all (but not part only) of its rights; or
	 
	 	(b)	 	transfer all (but not part only) of its rights (including such as relate to the
Lender’s participation in the Loan) and obligations,

	 	 	under any Finance Document to another bank or financial institution or to a trust, fund
(including CDOs and CLOs) or other entity which is regularly engaged in or established for
the purpose of making, purchasing or investing in loans, securities or other financial
assets (the “New Lender”).
	 
	24.2	 	Conditions of assignment or transfer

	 	(a)	 	The consent of the Borrower is required for an assignment or transfer by the
Existing Lender, provided that no such consent shall be required if the assignment or
transfer is:

	 	(i)	 	to an Affiliate of the Lender, or
	 
	 	(ii)	 	made at a time when a Default is continuing.

	 	(b)	 	The consent of the Borrower to an assignment or transfer must not be
unreasonably withheld or delayed. The Borrower will be deemed to have given its
consent five Business Days after the Existing Lender has requested it unless consent is
expressly refused in writing by the Borrower within that time.
	 
	 	(c)	 	The consent of the Borrower to an assignment or transfer must not be withheld
solely because the assignment or transfer may result in an increase to the Mandatory
Cost.
	 
	 	(d)	 	If:

	 	(i)	 	the Lender assigns or transfers its rights and obligations
under the Finance Documents or changes its Facility Office; and
	 
	 	(ii)	 	as a result of circumstances existing at the date the
assignment, transfer or change occurs, an Obligor would be obliged to make a
payment to the New Lender or Lender acting through its new Facility Office
under Clause 15 (Tax Gross Up and Indemnities) or Clause 16 (Increased Costs),

	 	 	 	then the New Lender or Lender acting through its new Facility Office is only
entitled to receive payment under those Clauses to the same extent as the Existing
Lender or Lender acting through its previous Facility Office would have been if the
assignment, transfer or change had not occurred.

	 	(e)	 	A transfer or assignment will only be effective if the procedure set out in
Clause 24.3 (Procedure for transfer or assignment) is complied with.

	24.3	 	Procedure for transfer or assignment
	 
	24.3.1.	 	By virtue of the execution of a Transfer Agreement, as from the Transfer Date:

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	 	(a)	 	the Existing Lender shall be discharged from further obligations towards each
of the Obligors under the Finance Documents;
	 
	 	(b)	 	all of the rights and/or obligations of the Existing Lender with respect to the
Obligors shall be transferred to the New Lender; and
	 
	 	(c)	 	the New Lender shall become a Party as a “Lender”.

	24.3.2.	 	The New Lender shall accede to the Security Sharing Agreement in accordance with the terms
thereof.
	 
	24.4	 	Copy of Transfer Agreement to Borrower
	 
	 	 	The New Lender shall, as soon as reasonably practicable after it has executed a Transfer
Agreement, send to the Borrower a copy of that Transfer Agreement.
	 
	24.5	 	Security over the Lender’s rights
	 
	 	 	In addition to the other rights provided to the Lender under this Clause 24, the Lender may
without consulting with or obtaining consent from any Obligor, at any time charge, assign as
a security or otherwise create Security in or over (whether by way of collateral or
otherwise) all or any of its rights under any Finance Document to secure obligations of the
Lender including, without limitation:

	 	(a)	 	any charge, assignment or other Security to secure obligations to a federal
reserve or central bank; and
	 
	 	(b)	 	if the Lender is a fund, any charge, assignment as security or other Security
granted to any holders (or trustee or representatives of holders) of obligations owed,
or securities issued, by that Lender as security for those obligations or securities,

	 	 	except that no such charge, assignment or Security shall:

	 	(i)	 	release the Lender from any of its obligations under the
Finance Documents or substitute the beneficiary of the relevant charge,
assignment as security or Security for the Lender as a party to any of the
Finance Documents; or
	 
	 	(ii)	 	require any payments to be made by an Obligor other than or in
excess of, or grant to any person any more extensive rights than, those
required to be made or granted to the Lender under the Finance Documents.

	25.	 	PAYMENT MECHANICS
	 
	25.1	 	Payments to the Lender
	 
	25.1.1.	 	On each date on which the Borrower is required to make a payment under a Finance Document,
the Borrower shall make the same available to the Lender (unless a contrary indication appears
in a Finance Document) for value on the due date at the time and in such funds specified by
the Lender as being customary at the time for
settlement of transactions in the relevant currency in the place of payment.

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	25.1.2.	 	Payment shall be made to such account in the principal financial centre of the country of
that currency (or, in relation to euro, in a principal financial centre in a Participating
Member State or London) with such bank as the Lender specifies.
	 
	25.2	 	Partial payments
	 
	 	 	If the Lender receives a payment for application against amounts due in respect of any
Finance Documents that is insufficient to discharge all the amounts then due and payable by
an Obligor under those Finance Documents, the Lender shall apply that payment towards the
obligations of that Obligor under those Finance Documents in the following order:

	 	(i)	 	first, in or towards payment pro rata of any unpaid
fees, costs and expenses of the Lender under the Finance Documents;
	 
	 	(ii)	 	second, in or towards payment pro rata of any accrued
interest, fee or commission due but unpaid under this Agreement;
	 
	 	(iii)	 	third, in or towards payment pro rata of any principal
due but unpaid under this Agreement; and
	 
	 	(iv)	 	fourth, in or towards payment pro rata of any other sum
due but unpaid under the Finance Documents.

	25.3	 	No set-off by the Borrower
	 
	 	 	All payments to be made by the Borrower under the Finance Documents shall be calculated and
be made without (and free and clear of any deduction for) set-off or counterclaim.
	 
	25.4	 	Business Days
	 
	25.4.1.	 	Any payment which is due to be made on a day that is not a Business Day shall be made on
the next Business Day in the same calendar month (if there is one) or the preceding Business
Day (if there is not).
	 
	25.4.2.	 	During any extension of the due date for payment of any principal or an Unpaid Sum under
this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date.
	 
	25.5	 	Currency of account
	 
	25.5.1.	 	Subject to Clauses 25.5.2 to 25.5.5 below, euro is the currency of account and payment for
any sum due from the Borrower under any Finance Document.
	 
	25.5.2.	 	A repayment of the Loan or an Unpaid Sum or a part of the Loan or Unpaid Sum shall be made
in the currency in which the Loan or Unpaid Sum is denominated on its due date.
	 
	25.5.3.	 	Each payment of interest shall be made in the currency in which the sum in respect of
which the interest is payable was denominated when that interest accrued.

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	25.5.4.	 	Each payment in respect of costs, expenses or Taxes shall be made in the currency in which
the costs, expenses or Taxes are incurred.
	 
	25.5.5.	 	Any amount expressed to be payable in a currency other than euro shall be paid in that
other currency.
	 
	25.6	 	Change of currency
	 
	25.6.1.	 	Unless otherwise prohibited by law, if more than one currency or currency unit are at the
same time recognized by the central bank of any country as the lawful currency of that
country, then:

	 	(a)	 	any reference in the Finance Documents to, and any obligations arising under
the Finance Documents in, the currency of that country shall be translated into, or
paid in, the currency or currency unit of that country designated by the Lender (after
consultation with the Borrower); and
	 
	 	(b)	 	any translation from one currency or currency unit to another shall be at the
official rate of exchange recognized by the central bank for the conversion of that
currency or currency unit into the other, rounded up or down by the Lender (acting
reasonably).

	25.6.2.	 	If a change in any currency of a country occurs, this Agreement will, to the extent the
Lender (acting reasonably and after consultation with the Borrower) specifies to be necessary,
be amended to comply with any generally accepted conventions and market practice in the
European interbank market and otherwise to reflect the change in currency.
	 
	26.	 	SET-OFF
	 
	 	 	Subject to the terms of the Security Sharing Agreement, the Lender may set off any matured
obligation due from the Borrower under the Finance Documents (to the extent beneficially
owned by the Lender) against any matured obligation owed by the Lender to the Borrower,
regardless of the place of payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Lender may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the set-off.
	 
	27.	 	NOTICES
	 
	27.1	 	Communications in writing
	 
	 	 	Any communication to be made under or in connection with the Finance Documents shall be made
in writing and, unless otherwise stated, may be made by fax or letter.
	 
	27.2	 	Addresses
	 
	 	 	The address and fax number (and the department or officer, if any, for whose attention the
communication is to be made) of each Party for any communication or document to be made or
delivered under or in connection with the Finance Documents is that

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	 	 	identified with its name below (or, with respect to the Security Agent, at its address as
indicated in accordance with the Security Sharing Agreement), or any substitute address or
fax number or department or officer as the Party may notify to the other Parties by not less
than five Business Days’ notice.
	 
	27.3	 	Delivery
	 
	27.3.1.	 	Any communication or document made or delivered by one person to another under or in
connection with the Finance Documents will only be effective:

	 	(a)	 	if by way of fax, when received in legible form; or
	 
	 	(b)	 	if by way of letter, when it has been left at the relevant address or five
Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address.

	27.3.2.	 	Any communication or document to be made or delivered to the Lender or the Security Agent
will be effective only when actually received by the Lender or the Security Agent and then
only if it is expressly marked for the attention of the department or officer identified with
the Lender’s signature below (or any substitute department or officer as the Lender shall
specify for this purpose) (or, with respect to the Security Agent, at its address as indicated
in accordance with the Security Sharing Agreement).
	 
	27.3.3.	 	Any communication or document made or delivered to the Borrower in accordance with this
Clause will be deemed to have been made or delivered to each of the Obligors.
	 
	27.4	 	English language
	 
	27.4.1.	 	Any notice given under or in connection with any Finance Document must be in English.
	 
	27.4.2.	 	All other documents provided under or in connection with any Finance Document must be:

	 	(a)	 	in English; or
	 
	 	(b)	 	if not in English, and if so required by the Lender, accompanied by a certified
English translation and, in this case, the English translation will prevail unless the
document is a constitutional, statutory or other official document.

	28.	 	CALCULATIONS AND CERTIFICATES
	 
	28.1	 	Accounts
	 
	 	 	In any litigation or arbitration proceedings arising out of or in connection with a Finance
Document, entries made in the accounts maintained by the Lender are prima facie evidence of
the matters to which they relate.

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	28.2	 	Certificates and Determinations
	 
	 	 	Any certification or determination by the Lender of a rate or amount under any Finance
Document is, in the absence of manifest error, conclusive evidence of the matters to which
it relates.
	 
	28.3	 	Day count convention
	 
	 	 	Any interest, commission or fee accruing under a Finance Document will accrue from day to
day and is calculated on the basis of the actual number of days elapsed and a year of 360
days or, in any case where the practice in the European interbank market differs, in
accordance with that market practice.
	 
	29.	 	PARTIAL INVALIDITY
	 
	 	 	If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction will in any way be
affected or impaired.
	 
	30.	 	REMEDIES AND WAIVERS
	 
	 	 	No failure to exercise, nor any delay in exercising, on the part of the Lender, any right or
remedy under the Finance Documents shall operate as a waiver, nor shall any single or
partial exercise of any right or remedy prevent any further or other exercise or the
exercise of any other right or remedy. The rights and remedies provided in this Agreement
are cumulative and not exclusive of any rights or remedies provided by law.
	 
	31.	 	AMENDMENTS AND WAIVERS
	 
	 	 	Subject to the terms of the Security Sharing Agreement, any term of the Finance Documents
may be amended or waived only with the consent of the Lender and the Obligors and any such
amendment or waiver will be binding on all Parties.
	 
	32.	 	CONFIDENTIALITY
	 
	32.1	 	Confidential Information
	 
	 	 	The Lender agrees to keep all Confidential Information confidential and not to disclose it
to anyone, save to the extent permitted by Clause 32.2 (Disclosure of Confidential
Information) and Clause 32.3 (Disclosure to numbering providers), and to ensure that all
Confidential Information is protected with security measures and a degree of care that would
apply to its own confidential information.
	 
	32.2	 	Disclosure of Confidential Information
	 
	 	 	The Lender may, subject (where applicable) to the provisions of article L.511-33 of the
French Code monétaire et financier, disclose:

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	 	(a)	 	to any of its Affiliates and Related Funds and any of its or their officers,
directors, employees, professional advisers, auditors, partners and Representatives
such Confidential Information as the Lender shall consider appropriate if any person
to whom the Confidential Information is to be given pursuant to this paragraph (a)
is informed in writing of its confidential nature and that some or all of such
Confidential Information may be price-sensitive information except that there shall
be no such requirement to so inform if the recipient is subject to professional
obligations to maintain the confidentiality of the information or is otherwise bound
by requirements of confidentiality in relation to the Confidential Information;
	 
	 	(b)	 	to any person:

	 	(i)	 	to (or through) whom it assigns or transfers (or may
potentially assign or transfer) all or any of its rights and/or obligations
under one or more Finance Documents and to any of that person’s Affiliates,
Related Funds, Representatives and professional advisers;
	 
	 	(ii)	 	with (or through) whom it enters into (or may potentially enter
into), whether directly or indirectly, any sub-participation in relation to, or
any other transaction under which payments are to be made or may be made by
reference to, one or more Finance Documents and/or one or more Obligors and to
any of that person’s Affiliates, Related Funds, Representatives and
professional advisers;
	 
	 	(iii)	 	appointed by the Lender or by a person to whom paragraph
(b)(i) or (ii) above applies to receive communications, notices, information or
documents delivered pursuant to the Finance Documents on its behalf;
	 
	 	(iv)	 	who invests in or otherwise finances (or may potentially invest
in or otherwise finance), directly or indirectly, any transaction referred to
in paragraph (b)(i) or (b)(ii) above;
	 
	 	(v)	 	to whom information is required or requested to be disclosed by
any court of competent jurisdiction or any governmental, banking, taxation or
other regulatory authority or similar body, the rules of any relevant stock
exchange or pursuant to any applicable law or regulation;
	 
	 	(vi)	 	to whom or for whose benefit the Lender charges, assigns or
otherwise creates Security (or may do so) pursuant to Clause 24.5 (Security
over the Lender’s rights);
	 
	 	(vii)	 	to whom information is required to be disclosed in connection
with, and for the purposes of, any litigation, arbitration, administrative or
other investigations, proceedings or disputes;
	 
	 	(viii)	 	who is a Party; or
	 
	 	(ix)	 	with the consent of the Borrower;

	 	 	 	in each case, such Confidential Information as the Lender shall consider appropriate
if:

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	 	(A)	 	in relation to paragraphs (b)(i), (b)(ii) and (b)(iii) above,
the person to whom the Confidential Information is to be given has entered into
a Confidentiality Undertaking except that there shall be no requirement for a
Confidentiality Undertaking if the recipient is a professional adviser and is
subject to professional obligations to maintain the confidentiality of the
Confidential Information;
	 
	 	(B)	 	in relation to paragraph (b)(iv) above, the person to whom the
Confidential Information is to be given has entered into a Confidentiality
Undertaking or is otherwise bound by requirements of confidentiality in
relation to the Confidential Information they receive and is informed that some
or all of such Confidential Information may be price-sensitive information;
	 
	 	(C)	 	in relation to paragraphs (b)(v), (b)(vi) and (b)(vii) above,
the person to whom the Confidential Information is to be given is informed of
its confidential nature and that some or all of such Confidential Information
may be price-sensitive information except that there shall be no requirement to
so inform if, in the opinion of the Lender, it is not practicable so to do in
the circumstances;

	 	(c)	 	to any person appointed by the Lender or by a person to whom paragraph (b)(i),
or (b)(ii) above applies to provide administration or settlement services in respect of
one or more of the Finance Documents including without limitation, in relation to the
trading of participations in respect of the Finance Documents, such Confidential
Information as may be required to be disclosed to enable such service provider to
provide any of the services referred to in this paragraph (c) if the service provider
to whom the Confidential Information is to be given has entered into a confidentiality
agreement substantially in the form of the LMA Master Confidentiality Undertaking for
Use With Administration/Settlement Service Providers or such other form of
confidentiality undertaking agreed between the Borrower and the Lender.

	32.3	 	Disclosure to numbering providers

	 	(a)	 	The Lender may, subject (where applicable) to the provisions of article
L.511-33 of the French Code monétaire et financier, disclose to any national or
international numbering service provider appointed by the Lender to provide
identification numbering services in respect of this Agreement, the Loan and/or one or
more Obligors the following information:

	 	(i)	 	names of Obligors;
	 
	 	(ii)	 	country of domicile of Obligors;
	 
	 	(iii)	 	place of incorporation of Obligors;
	 
	 	(iv)	 	date of this Agreement;
	 
	 	(v)	 	the names of the Lender;
	 
	 	(vi)	 	date of each amendment and restatement of this Agreement;

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	 	(vii)	 	amount of the Commitment;
	 
	 	(viii)	 	currency of the Loan;
	 
	 	(ix)	 	type of Loan;
	 
	 	(x)	 	ranking of Loan;
	 
	 	(xi)	 	Termination Date for Loan;
	 
	 	(xii)	 	changes to any of the information previously supplied pursuant
to paragraphs (i) to (xi) above; and
	 
	 	(xiii)	 	such other information agreed between the Lender and the Borrower,

	 	 	 	to enable such numbering service provider to provide its usual loan numbering
identification services.
	 
	 	(b)	 	The Parties acknowledge and agree that each identification number assigned to
this Agreement, the Loan and/or one or more Obligors by a numbering service provider
and the information associated with each such number may be disclosed to users of its
services in accordance with the standard terms and conditions of that numbering service
provider.
	 
	 	(c)	 	The Borrower represents that none of the information set out in paragraphs (i)
to (xiii) of paragraph (a) above is, nor will at any time be, unpublished
price-sensitive information.
	 
	 	(d)	 	The Lender shall notify the Borrower of:

	 	(i)	 	the name of any numbering service provider appointed by the
Lender in respect of this Agreement, the Loan and/or one or more Obligors; and
	 
	 	(ii)	 	the number or, as the case may be, numbers assigned to this
Agreement, the Loan and/or one or more Obligors by such numbering service
provider.

	32.4	 	Entire agreement
	 
	 	 	Subject to the provisions of article L.511-33 of the French Code monétaire et financier,
this Clause 32 constitutes the entire agreement between the Parties in relation to the
obligations of the Lender under the Finance Documents regarding Confidential Information and
supersedes any previous agreement, whether express or implied, regarding Confidential
Information.
	 
	32.5	 	Inside information
	 
	 	 	The Lender acknowledges that some or all of the Confidential Information is or may be
price-sensitive information and that the use of such information may be regulated or
prohibited by applicable legislation including securities law relating to insider

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	 	 	dealing and market abuse and the Lender undertakes not to use any Confidential Information
for any unlawful purpose.
	 
	32.6	 	Notification of disclosure
	 
	 	 	The Lender agrees (to the extent permitted by law and regulation) to inform the Borrower:

	 	(a)	 	of the circumstances of any disclosure of Confidential Information made
pursuant to paragraph (b)(v) of Clause 32.2 (Disclosure of Confidential Information)
except where such disclosure is made to any of the persons referred to in that
paragraph during the ordinary course of its supervisory or regulatory function; and
	 
	 	(b)	 	upon becoming aware that Confidential Information has been disclosed in breach
of this Clause 32.

	32.7	 	Continuing obligations
	 
	 	 	The obligations in this Clause 32 are continuing and, in particular, shall survive and
remain binding on the Lender for a period of twelve months from the date on which all
amounts payable by the Obligors under or in connection with this Agreement have been paid in
full and the Commitment has been cancelled or otherwise ceases to be available.
	 
	33.	 	SECURITY SHARING AGREEMENT
	 
	 	 	Notwithstanding anything to the contrary contained herein, this Agreement is subject to the
provisions of the Security Sharing Agreement, including without limitation, clauses 6 (SG
Financing Debt) and 7.2 (Turnover) thereof.
	 
	34.	 	GOVERNING LAW
	 
	 	 	This Agreement is governed by French law.
	 
	35.	 	ENFORCEMENT — JURISDICTION OF FRENCH COURTS
	 
	35.1.1.	 	The Tribunal de Commerce de Paris has exclusive jurisdiction to settle any dispute arising
out of or in connection with this Agreement (including a dispute relating to the existence,
validity or termination of this Agreement) (a “Dispute”).
	 
	35.1.2.	 	Clause 35.1.1 is for the benefit of the Lender only. As a result, the Lender shall not be
prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.
To the extent allowed by law, the Lender may take concurrent proceedings in any number of
jurisdictions.
	 
	36.	 	ELECTION OF DOMICILE
	 
	 	 	Without prejudice to any other mode of service allowed under any relevant law, each Obligor
irrevocably elects domicile at c/o Pilot SAS, 162, rue Belharra, 64500 Saint-Jean-de-Luz, ,
Paris, France for the purpose of serving any judicial or extra-judicial documents in
relation to any action or proceedings referred to above.

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	 	 	This Agreement has been executed by the parties hereto in four (4) originals on the day and
year first above written.

SIGNATORIES

	 	 	 	 	 
	 	QS FINANCE LUXEMBOURG S.A.,

as Borrower

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	 	 	 
	 
	 	QUIKSILVER, INC.,

as Guarantor

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	 	 	 
	 
	 	BIARRITZ HOLDINGS, S.À R.L., as

Guarantor

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	 	 	 
	 
	 	SOCIÉTÉ GÉNÉRALE,

as Lender

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	 	 	 
	 

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Schedule 1

Conditions Precedent

Part I

Conditions Precedent to Signing

	1.	 	Obligors

	 	(a)	 	A copy of the constitutional documents and (with respect to Obligors other than
Quiksilver, Inc.) the up-to-date share register of each Obligor (including (with
respect to Obligors other than Quiksilver, Inc.) a non-bankruptcy certificate and, with
respect to Quiksilver, Inc., lien searches, in each case not more than 10 days old);
	 
	 	(b)	 	A copy of a resolution of the board of directors (or any other appropriate
corporate body) of each Obligor:
	 
	 	(i)	 	approving the terms of, and the transactions contemplated by, the Finance
Documents referred to in paragraph 2 (Finance Documents) below to which it is a party
and resolving that it execute, deliver and perform the Finance Documents referred to in
paragraph 2 (Finance Documents) below to which it is a party and any document
contemplated to be delivered under or in connection with any of the foregoing
transactions or documents;
	 
	 	(ii)	 	authorizing a specified person or persons to execute the Finance Documents
referred to in paragraph 2 (Finance Documents) below to which it is a party on its
behalf; and
	 
	 	(iii)	 	authorizing a specified person or persons, on its behalf, to sign and/or
deliver all documents and notices (including, if relevant, any Utilization Request and
Selection Notice) to be signed and/or delivered by it under or in connection with the
Finance Documents referred to in paragraph 2 (Finance Documents) to which it is a
party.
	 
	 	(c)	 	A specimen of the signature of each person authorized by the resolution
referred to in paragraph (b) above in relation to the Finance Documents and related
documents and, if applicable, a copy of any power of attorney authorizing such person
to execute such documents.
	 
	 	(d)	 	A certificate of an authorized signatory of the relevant Obligor certifying
that each copy document relating to it specified in paragraph 1 of this Part I of
Schedule 1 is correct, complete and in full force and effect and has not been amended
or superseded as at a date no earlier than the date of this Agreement.
	 
	 	(e)	 	A certificate of the Borrower and Quiksilver, Inc. (signed by a legal
representative of these companies) confirming that borrowing or guaranteeing

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	 	 	 	or securing, as appropriate, the Loan would not cause any borrowing, guarantee,
security or similar limit binding on any Obligor to be exceeded.

	2.	 	Finance Documents

	 	(a)	 	This Agreement executed by the Obligors.
	 
	 	(b)	 	The Fee Letter and the TEG Letter executed by the Borrower.
	 
	 	(c)	 	The fully executed Subordination Agreement.
	 
	 	(d)	 	The fully executed Security Sharing Agreement.
	 
	 	(e)	 	An original executed copy of the Guarantee (including the Quiksilver, Inc.
Undertaking).
	 
	 	(f)	 	An original executed copy of the Transaction Security Document.
	 
	 	(g)	 	A copy of all notices required to be sent under the Transaction Security
Document executed by the Borrower and duly acknowledged by the addressee as
contemplated in the relevant Transaction Security Document.
	 
	 	(h)	 	A copy of all other documents to be provided on or prior to signing this
Agreement pursuant to the Transaction Security Document.

	3.	 	Legal opinions

	 	(a)	 	A legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP, legal adviser to
the Borrower, as to the laws of the State of Delaware and the United States of America
(1) covering the valid existence of Quiksilver, Inc., (2) covering the capacity and due
authorisation of Quiksilver, Inc. to enter into the Finance Documents to which it is a
party, (3) covering the validity of the Finance Documents governed by the laws of the
relevant States of the United States of America and (4) confirming that the entering
into the Finance Documents by the Obligors does not conflict with or breach any of the
provisions of the 2009 ABL Agreement, the Rhône Financing Documents and/or the US
Indenture (in each case, as defined in the Pilot and Na Pali Facilities Agreement);
	 
	 	(b)	 	A legal opinion of AMMC Law, legal adviser to the Borrower and Biarritz
Holdings as to Luxembourg law covering (1) the valid existence of the Borrower and
Biarritz Holdings, (2) the capacity and due authorization of the Borrower and Biarritz
Holdings to enter into the Finance Documents to which it is a party and (3) the absence
of insolvency proceedings against the Borrower and Biarritz Holdings on the Closing
Date (subject to customary reservations and qualifications);
	 
	 	(c)	 	A legal opinion of White & Case LLP, legal advisers to the Lender as to French
law covering the validity of this Agreement, the Subordination Agreement and the
Security Sharing Agreement; and

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	 	(d)	 	A legal opinion of NautaDutilh Avocats Luxembourg, legal advisor to the Lender
as to Luxembourg law covering the validity of the Transaction Security Document.

	4.	 	Other documents and evidence

	 	(a)	 	Evidence that the fees, costs and expenses (including legal fees) then due by
the Borrower to the Lender have been paid.
	 
	 	(b)	 	An up to date structure chart including Quiksilver, Inc., Biarritz Holdings,
the Borrower and all of the Subsidiaries of the Borrower and Biarritz Holdings.
	 
	 	(c)	 	A certificate of a legal representative of the Borrower addressed to the Lender
confirming which Subsidiaries are Material Subsidiaries as of the date of this
Agreement.
	 
	 	(d)	 	Evidence that all applicable anti-money laundering and “know your customer”
laws, regulations and procedures (including internal procedures of the Lender)
applicable to each Obligor have been complied with.
	 
	 	(e)	 	Copies of the corporate approvals and agreements relating to the QSH/Biarritz
Holdings Contribution and evidence that the QSH/Biarritz Holdings Contribution has been
consummated.
	 
	 	(f)	 	The Structure Memorandum and an addendum to the Structure Memorandum addressed
to, or capable of being relied upon by, the Lender, confirming that the Pre-Closing
Permitted Restructuring (as defined in the Pilot and Na Pali Facilities Agreement) has
been duly and legally completed as described in the Structure Memorandum.
	 
	 	(g)	 	An amendment to the SG Bonds in order to include, inter alia, a cross-default
in respect of the Pilot and Na Pali Facilities Agreement.
	 
	 	(h)	 	An executed copy of the Pilot and Na Pali Facilities Agreement and evidence
that the Senior Facilities Closing Date has occurred or will occur simultaneously with
the execution of this Agreement.

	5.	 	Miscellaneous
	 
	 	 	A list of the Material Trademarks on the date of this Agreement.

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Part II

Post-Closing Conditions

	1.	 	Obligors

	 	(a)	 	A copy of the constitutional documents and (with respect to Obligors other than
Quiksilver, Inc.) the up-to-date share register of each Obligor (including (with
respect to Obligors other than Quiksilver, Inc.) a non-bankruptcy certificate and, with
respect to Quiksilver, Inc., lien searches, in each case not more than 10 days old);
	 
	 	(b)	 	A certificate of an authorized signatory of the relevant Obligor certifying
that each copy document relating to it specified in this Part II of Schedule 1 is
correct, complete and in full force and effect and has not been amended or superseded
as at a date no earlier than the date of this Agreement.
	 
	 	(c)	 	A certificate of the Borrower and Quiksilver, Inc. (signed by a legal
representative of these companies) confirming that borrowing or guaranteeing or
securing, as appropriate, the Loan would not cause any borrowing, guarantee, security
or similar limit binding on any Obligor to be exceeded.

	2.	 	Other documents and evidence

	 	(a)	 	Evidence that the fees, costs and expenses (including legal fees) then due by
the Borrower to the Lender have been paid.
	 
	 	(b)	 	A copy of a funds flow statement describing the repayment in full of the SG
Bonds and the related interest, fees and expenses (including legal fees).

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Schedule 2

Requests

Part I

Utilization Request

	 	 	 	 	 
	 
	 	From:
	 	QS Finance Luxembourg S.A.
	 
	 	 	 	 
	 
	 	To:
	 	Société Générale
	 
	 	 	 	 
	 	 	Dated:
	 
	 	 	 	 
	 	 	Dear Sirs

QS Finance Luxembourg S.A. — Term Loan Agreement dated 29 September 2009

(the “Loan Agreement”)

	1.	 	We refer to the Loan Agreement. This is a Utilization Request. Terms defined in the Loan
Agreement have the same meaning in this Utilization Request unless given a different meaning
in this Utilization Request.
	 
	2.	 	We wish to borrow the Loan on the following terms:

	 	 	 	 	 	 	 
	 
	 	(a)	 	Borrower:	 	QS Finance Luxembourg S.A.
	 
	 	 	 	 	 	 
	 
	 	(b)	 	Proposed Utilization Date:	 	[                    ] (or, if that is not a Business Day, the next Business Day)
	 
	 	 	 	 	 	 
	 
	 	(c)
	 	Amount:
	 	€50,000,000 or, if less, the Commitment
	 
	 	 	 	 	 	 
	 
	 	(d)
	 	Interest Period:
	 	[                    ]

	3.	 	We confirm that each condition specified in Clause 5.15.1 (Conditions precedent) is satisfied
on the date of this Utilization Request.
	 
	4.	 	[The proceeds of this Loan should be credited to [account]].

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	5.	 	This Utilization Request is irrevocable.

Yours faithfully

                                                                  
                                  

authorized signatory for

QS FINANCE LUXEMBOURG S.A.

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Part II

Selection Notice

	 	 	 	 	 
	 
	 	From:
	 	QS Finance Luxembourg S.A.
	 
	 	 	 	 
	 
	 	To:
	 	Société Générale
	 
	 	 	 	 
	 	 	Dated:
	 
	 	 	 	 
	 	 	Dear Sirs
	 
	 	 	 	 
	 	 	QS Finance Luxembourg S.A. — Term Loan Agreement dated 29 September
2009 (the “Loan Agreement”)

	1.	 	We refer to the Loan Agreement. This is a Selection Notice. Terms defined in the Loan
Agreement have the same meaning in this Selection Notice unless given a different meaning in
this Selection Notice.
	 
	2.	 	We request that the next Interest Period for the Loan is [     ].
	 
	3.	 	This Selection Notice is irrevocable.
	 
	 	 	Yours faithfully
	 
	 	 	                                                                                
                    
	 
	 	 	authorized signatory for
	 
	 	 	QS FINANCE LUXEMBOURG S.A.

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Schedule 3

Timetables

	 	 	 
	Delivery of a duly completed
Utilization Request (Clause 6.1
(Delivery of a Utilization Request))
or a Selection Notice (Clause 12.1
(Selection of Interest Periods))
	 	U-3

9.30am
	 
	 	 
	EURIBOR is fixed
	 	Quotation Day as of 11.00 a.m.
(Brussels time) in respect of
EURIBOR

	 	 	 	 	 
	“U”
	 	=	 	date of utilization or, with respect to any Selection
Notice, the first day of the relevant Interest Period.
	 
	 	 	 	 
	“U - X”
	 	=	 	X Business Days prior to date of utilization or, with
respect to any Selection Notice, the first day of the
relevant Interest Period.

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Schedule 4

Material Subsidiaries

Emerald Coast SAS

Sumbawa SL

Lanaï Ltd.

Cariboo SARL

Omareef Europe SAS

- 77 -

 

Schedule 5

Mandatory Cost Formula

	1.	 	The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost
of compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank.
	 
	2.	 	On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall
calculate, as a percentage rate per annum, a rate (the “Additional Cost Rate”) in accordance
with the paragraphs set out below.
	 
	3.	 	The Additional Cost Rate for the Lender when lending from a Facility Office in a
Participating Member State will be its reasonable determination of the cost of complying with
the minimum reserve requirements of the European Central Bank in respect of loans made from
that Facility Office.
	 
	4.	 	The Additional Cost Rate for the Lender when lending from a Facility Office in the United
Kingdom will be calculated by the Lender as follows:

	 	 	 	 	 
	 
	 	A x 0.01
 
300
	 	per cent. per annum.
	 
	 	 	 	 
	 
	 	Where:	 	 
	 
	 	 	 	 
	 
	 	A
	 	is designed to compensate the Lender for amounts payable under
the Fees Rules and is calculated by the Lender as being the rate of charge
payable by the Lender to the Financial Services Authority pursuant to the Fees
Rules in respect of the relevant financial year of the Financial Services
Authority (calculated for this purpose by the Lender as being the average of
the Fee Tariffs applicable to the Lender for that financial year) and expressed
in pounds per £1,000,000 of the Tariff Base of the Lender.

	5.	 	For the purposes of this Schedule:

	 	(a)	 	“Fees Rules” means the rules on periodic fees contained in the FSA Supervision
Manual or such other law or regulation as may be in force from time to time in respect
of the payment of fees for the acceptance of deposits;
	 
	 	(b)	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable discount
rate); and
	 
	 	(c)	 	“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

- 78 -

 

	 	6.	 	Any determination by the Lender pursuant to this Schedule in relation to a formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the
absence of manifest error, be conclusive and binding on all Parties.
	 
	 	7.	 	The Lender may from time to time, after consultation with the Borrower, determine and notify
to all Parties any amendments which are required to be made to this Schedule in order to
comply with any change in law, regulation or any requirements from time to time imposed by the
Bank of England, the Financial Services Authority or the European Central Bank (or, in any
case, any other authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and binding on all
Parties.

- 79 -exv10w1

Exhibit 10.1

FREIGHTCAR AMERICA, INC.

EXECUTIVE SEVERANCE PLAN

(and Summary Plan Description)

Article 1. Establishment and Term of the Plan 

     1.1 Establishment of the Plan. The Company hereby establishes the FreightCar America, Inc.
Executive Severance Plan. The Plan provides severance benefits to certain eligible executives of
the Company as designated from time to time by the Plan Administrator and set forth on Appendix A
hereto (the “Executives”), subject to the terms and conditions of the Plan. No individuals other
than the Executives shall be eligible to receive any severance benefits under the Plan. Severance
benefits for the Executives will be determined exclusively under the Plan.

     The Plan, as set forth herein, is an employee welfare benefit plan within the meaning of ERISA
Section 3(1), and the Company intends that the Plan be administered in accordance with the
applicable requirements of ERISA and the regulations under ERISA. This Plan document, including
the information provided in Appendix B hereto, is also the summary plan description of the Plan.

     1.2 Plan Term. The Plan shall become effective on October 1, 2009 and shall continue in
effect until terminated by the Company.

     1.3 Plan Year. The plan year will be the 12-month period that begins each January 1.

     1.4 Administration. The Plan Administrator is the named fiduciary of the Plan. The Plan
Administrator may, as it deems necessary or advisable, appoint an individual or committee to act as
its representative in matters affecting the Plan. The Plan Administrator may adopt rules and
regulations it deems consistent with the terms of the Plan and necessary or advisable to administer
the Plan properly and efficiently. In administering the Plan and providing Severance Benefits, the
Plan Administrator has full discretionary authority to construe and interpret the Plan’s terms and
to make factual determinations under it, including the authority to determine an individual’s
eligibility for Severance Benefits, the reason for employment termination, and the amount of
Severance Benefits payable. Severance Benefits will be provided only if the Plan Administrator
decides in its sole discretion that the person seeking such benefits is entitled to them under the
terms of the Plan. Any interpretation of the Plan made in good faith by the Plan Administrator,
and any decision made in good faith on any matter within the discretion of the Plan Administrator
under the Plan, will be binding on all persons. Notwithstanding anything in this Section 1.4 to
the contrary, following a Change in Control, the Plan Administrator shall administer the Plan in a
manner consistent with the administration of the Plan prior to such Change in Control.

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Article 2. Definitions 

     Wherever used in the Plan, the following terms shall have the meanings set forth below and,
when the meaning is intended, the initial letter of the word is capitalized:

     2.1 “Base Salary” means, at any time, the then regular annual base rate of pay that the
Executive is receiving as annual salary.

     2.2 “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act.

     2.3 “Board” means the Board of Directors of the Company.

     2.4 “Bonus” means an annual cash bonus in accordance with the provisions of the Company’s
annual incentive program, as the same may be in effect from time to time.

     2.5 “Cause” means the occurrence of any one or more of the following:

     (a) The Executive’s willful and continued failure substantially to perform the
Executive’s material duties with the Company (other than due to Disability), or the
Executive’s commission of any activities constituting a material violation or material
breach of any Federal, state or foreign law, statute, regulation, or the like applicable to
the activities of the Company, in each case, after notice thereof from the Board to the
Executive and (where possible) a reasonable opportunity for the Executive to cease and cure
such failure, breach or violation in all respects;

     (b) Fraud, breach of fiduciary duty, dishonesty, misappropriation or other act or
omission by the Executive that causes material damage to the Company’s property or
business;

     (c) The Executive’s admission or conviction of, or plea of nolo contendere to, any
crime that, in the reasonable judgment of the Board, adversely affects the Company’s
reputation or the Executive’s ability to carry out the obligations of the Executive’s
employment;

     (d) The Executive’s failure to reasonably cooperate with the Company in any internal
investigation or administrative, regulatory or judicial proceeding, after notice thereof
from the Board to the Executive and a reasonable opportunity for the Executive to cure such
non-cooperation; or

     (e) Any act or omission by the Executive in violation or disregard of the Company’s
policies, including but not limited to the harassment and discrimination policies and
standards of conduct of the Company then in effect, in such a manner as to cause significant loss, damage or injury to the property,
reputation or employees of the Company.

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     In addition, the Executive’s employment shall be deemed to have terminated for Cause if, after
the Executive’s employment has terminated, facts and circumstances are discovered that would have
justified a termination for Cause. For purposes of the Plan, no act or failure to act on the
Executive’s part shall be considered “willful” unless it is done, or omitted to be done, by the
Executive in bad faith or without reasonable belief that such action or omission was in the best
interests of the Company. Any act or failure to act based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of
the Company.

     2.6 A “Change in Control” shall be deemed to have occurred if the conditions set forth in any
one of the following paragraphs shall have been satisfied:

     (a) Any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including any securities beneficially owned by such Person
that were acquired directly from the Company or its affiliates) representing 50% or more of
the combined voting power of the Company’s then outstanding securities; or

     (b) The shareholders of the Company approve a merger or consolidation of the Company
with any other corporation and such shareholder approval results in consummation of said
merger or consolidation, other than (i) a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, at least 60% of the
combined voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or similar
transaction) in which no Person or Persons acquire more than 50% of the combined voting
power of the Company’s then outstanding securities; or

     (c) The shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially
all the Company’s assets and such shareholder approval results in consummation of said
liquidation, sale or disposition.

     2.7 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended from
time to time.

     2.8 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

3

 

     2.9 “Company” means FreightCar America, Inc., a Delaware corporation, and any successor
thereto as provided in Article 7 herein.

     2.10 “Company Materials” shall have the meaning given to such term in Section 4.1 herein.

     2.11 “Confidential Information” shall have the meaning given to such term in Section 4.1
herein.

     2.12 “Disability” means, in the written opinion of a qualified physician selected by the
Company, the Executive is, by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months, (a) unable to engage in any substantial gainful activity, or (b) receiving
income replacement benefits for a period of not less than three months under the Company’s
disability plan.

     2.13 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

     2.14 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

     2.15 “Executive” means an eligible employee of the Company designated from time to time by the
Company and set forth on Appendix A hereto. No individuals other than those set forth on Appendix
A hereto shall be eligible to receive Severance Benefits under the Plan.

     2.16 “Good Reason” means, without the Executive’s written consent, the occurrence of any of
the following conditions, unless such condition is fully corrected within 60 days after written
notice thereof:

     (a) A Change in Control pursuant to which the buyer does not agree to employ the
Executive at or after the acquisition date on terms substantially comparable in the
aggregate to the terms on which the Executive is currently employed; or

     (b) The Company (i) permanently and materially diminishes the Executive’s authority,
duties, or responsibilities, including without limitation reporting responsibilities, (ii)
materially reduces the Executive’s overall compensation, including Base Salary, Bonus
opportunity and equity award participation, (iii) requires the Executive to relocate the
Executive’s principal business office to a location not within 50 miles of the Company’s
principal business office located in the Chicago, Illinois metropolitan area, or (iv)
materially breaches the terms of the Plan.

4

 

     Notwithstanding anything in the Plan to the contrary, a termination of employment due to Good
Reason must occur, if at all, within 120 days after the Company receives written notice of any one
or more of the conditions set forth in this Section 2.16. The Executive must provide the Company
with written notice of any one or more of the conditions set forth in this Section 2.16 within 90
days of the initial existence of the condition in order for such condition to constitute Good
Reason under the Plan.

     2.17 “Inventions” shall have the meaning given to such term in Section 4.5 herein.

     2.18 “Notice of Termination” means a written notice that shall indicate the specific
termination provision in the Plan relied upon, and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated.

     2.19 “Person” shall have the meaning given in Sections 13(d) and 14(d)(2) of the Exchange Act,
as modified and used herein, provided that a Person shall not include (a) the Company or any of its
subsidiaries, (b) a trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its subsidiaries, (c) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (d) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their ownership of stock of
the Company.

     2.20 “Plan” means this FreightCar America, Inc. Executive Severance Plan.

     2.21 “Plan Administrator” means the administrator of the Plan as designated by the Board.

     2.22 “Qualifying Termination” shall have the meaning given to such term in Section 3.2 herein.

     2.23 “Severance Benefits” shall have the meaning given to such term in Section 3.3 herein.

Article 3. Severance Benefits

     3.1 Eligibility for Severance Benefits. Subject to the conditions and limitations of the
Plan, an Executive who experiences a Qualifying Termination shall be entitled to receive Severance
Benefits. Notwithstanding the preceding sentence, eligibility for the receipt of Severance
Benefits under the Plan is expressly conditioned upon the execution by the Executive of a
comprehensive release agreement and waiver of claims against the Company in a form to be determined
in the sole discretion of the Company, as well as compliance with the restrictive covenants of
Article 4. An Executive who does not execute a release agreement within the period specified, or
who revokes it, or who does not comply with the restrictive covenants of Article 4, will not be entitled to Severance Benefits under the Plan.

5

 

     3.2 Qualifying Termination. The occurrence of either or both of the following events (a
“Qualifying Termination”) shall entitle the Executive to receive Severance Benefits:

     (a) The Company’s termination of the Executive’s employment without Cause; or

     (b) The Executive’s termination of employment with the Company for Good Reason.

     For purposes of the Plan, an Executive’s employment with the Company shall be deemed to be
terminated when the Executive has a “separation from service” within the meaning of Code Section
409A, and references to termination of employment shall be deemed to refer to such a separation
from service.

     3.3 Description of Severance Benefits. In the event that the Executive experiences a
Qualifying Termination, the Company shall pay to the Executive (or the Executive’s representative)
and provide the Executive (or the Executive’s representative) with the following “Severance
Benefits”:

     (a) Within 60 days following the date of termination, (i) the Executive’s earned but
unpaid Base Salary through the date of termination, (ii) any Bonus for which the
performance measurement period has ended and the payment amount earned, but that is unpaid
at the time of termination, (iii) any accrued but unpaid vacation, (iv) any amounts payable
under any of the Company’s employee benefit plans in accordance with the terms of those
plans, and (v) any unreimbursed business expenses incurred by the Executive on the
Company’s behalf prior to the date of termination;

     (b) Continuation of the Executive’s Base Salary (without regard to any reduction
thereof constituting Good Reason) for 12 months following the date of termination, to be
paid in accordance with the Company’s normal payroll practices;

     (c) A payment equal to the average annual bonus paid to the Executive for the last two
full years, calculated as the quotient of (i) the sum of the Bonus amounts paid to the
Executive for the last two full years prior to termination (annualizing any Bonus awarded
for less than a full year of employment), divided by (ii) two (2), with
payment to be made on the first March 15 following the year of the Executive’s termination;
and

     (d) Continued participation in the Company’s group health plan for the Executive, and
such members of the Executive’s family who participated in such group health plan at the
time of the Executive’s termination, for a period of 12 months

6

 

at the same costs and coverage levels and under the same general terms and
provisions of such plan as apply to active employees after the Executive’s termination.
The continuation period required by this Section 3.3(d) shall be concurrent with the
continued group health plan coverage required by COBRA. The cost of continued group health
plan coverage for any periods beyond those specified in this Section 3.3(d) shall be the
sole responsibility of the Executive.

     No Severance Benefits provided to the Executive hereunder shall be reduced by any amount the
Executive may earn or receive from employment with another employer or from any other source
following the Executive’s termination of employment with the Company and during the period
Severance Benefits are being provided.

     Notwithstanding anything in this Section 3.3 to the contrary, Severance Benefits under the
Plan are contingent upon the Executive signing a release and waiver of claims and Severance
Benefits will not be provided before the date that the Executive’s signed release and waiver of
claims is received by the Company or has become irrevocable, whichever is later. If an Executive
fails to comply with the terms and conditions of the release agreement or with the restrictive
covenants of Article 4, as determined by the Plan Administrator, while receiving Severance Benefits
under the Plan, the Company will cease payment of Severance Benefits to the Executive.

     3.4 Death or Disability. If the Executive’s employment is terminated due to the Executive’s
death or Disability, the Company shall pay the Executive (or the Executive’s representative) the
benefits and amounts under Section 3.3(a) herein in accordance with that Section (including without
limitation life or long-term disability insurance benefits), and the Company shall have no further
obligations to the Executive (or the Executive’s representative) under the Plan.

     3.5 Termination for Cause or by the Executive Other Than for Good Reason. If the Executive’s
employment is terminated either (a) by the Company for Cause or (b) by the Executive other than for
Good Reason, the Company shall pay the Executive the benefits and amounts under Section 3.3(a)
herein in accordance with that Section and the Company shall have no further obligations to the
Executive under the Plan.

     3.6 Notice of Termination. Any termination of the Executive’s employment by the Company for
Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the
other party.

Article 4. Restrictive Covenants 

     Severance Benefits under the Plan are expressly conditioned on the Executive’s compliance with
each of the restrictive covenants of this Article 4.

     4.1 Confidential Information and Company Materials. The Company possesses and will possess
Confidential Information that is important to its business. The

7

 

Company devotes significant financial, human and other resources to the development of its
products, its customer base and the general goodwill associated with its business and the Company
diligently maintains the secrecy and confidentiality of its Confidential Information. For purposes
of the Plan, “Confidential Information” is information that was or will be developed, created, or
discovered by or on behalf of the Company, or that became or will become known by, or was or is
conveyed to the Company, that has commercial value in the Company’s business. Confidential
Information is sufficiently secret to derive economic value from its not being generally known to
other persons. Confidential Information also includes any and all financial, technical, commercial
or other information concerning the business and affairs of the Company that is confidential and
proprietary to the Company, including without limitation, (a) information relating to the Company’s
past and existing customers and vendors and development of prospective customers and vendors,
including without limitation specific customer product requirements, pricing arrangements, payment
terms, customer lists and other similar information; (b) inventions, designs, methods, discoveries,
works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or
used by the Company; (c) the Company’s proprietary programs, processes or software, consisting of
but not limited to, computer programs in source or object code and all related documentation and
training materials, including all upgrades, updates, improvements, derivatives and modifications
thereof and including programs and documentation in incomplete stages of design or research and
development; (d) the subject matter of the Company’s patents, design patents, copyrights, trade
secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions,
training materials, and other industrial property, including such information in incomplete stages
of design or research and development; and (e) other confidential and proprietary information or
documents relating to the Company’s products, business and marketing plans and techniques, sales
and distribution networks and any other information or documents that the Company reasonably
regards as being confidential.

     The Company possesses or will possess “Company Materials” that are important to its business.
For purposes of the Plan, “Company Materials” are documents or other media or tangible items that
contain or embody Confidential Information or any other information concerning the business,
operations or future/strategic plans of the Company, whether such documents have been prepared by
the Executive or by others.

     (a) All Confidential Information and trade secret rights, and other intellectual
property and rights in connection therewith will remain the sole property of the Company.
At all times after termination of the Executive’s employment for any reason, the Executive
will keep in confidence and trust and will not use or disclose any Confidential Information
or anything relating to it without the prior written consent of a then current officer of
the Company.

     (b) All Company Materials will be and remain the sole property of the Company.
Immediately upon the termination of the Executive’s employment for any reason, the
Executive will return all Company Materials, apparatus, equipment and other physical
property, or any reproduction of such property.

8

 

     4.2 Noncompetition and Nonsolicitation. For a period of 12 consecutive months after
termination of the Executive’s employment for any reason, the Executive will not, directly or
indirectly:

     (a) Contact, solicit, interfere with, or divert, or induce or attempt to contact,
solicit, interfere with or divert, any of the Company’s customers;

     (b) Participate or engage in (as an owner, partner, employee, officer, director,
independent contractor, consultant, advisor or in any other capacity calling for the
rendition of services, advice, or acts of management, operation or control) any business
engaged in the manufacture of railcars in North America; or

     (c) Solicit or induce or attempt to solicit or induce, by or for himself, or as the
agent of another, or through others as an agent in any way, any person who is employed by
the Company for the purpose of encouraging that employee to join the Executive as a
partner, agent, employee or otherwise in any business activity that is competitive with the
Company.

     4.3 Non-disparagement. For a period of 12 consecutive months after termination of the
Executive’s employment for any reason, the Executive will not, directly or indirectly, make any
statements, written or verbal, or cause or encourage others to make any statements, written or
verbal, that defame, disparage or in any way criticize the personal or business reputation,
practices, or conduct of the Company, its employees, directors, or officers. The Executive
acknowledges and agrees that this prohibition extends to statements, written or verbal, made to
anyone, including but not limited to the news media, investors, potential investors, any board of
directors, industry analysts, competitors, strategic partners, vendors, employees (past and
present), and customers.

     4.4 Forfeitures. To the maximum extent permitted by applicable law, the Executive shall
forfeit all of the Severance Benefits, and the Company shall have the right to recapture and seek
repayment of any such Severance Benefits in the event that:

     (a) The Executive breaches any of the restrictions or covenants in this Article 4;
or

     (b) The Company’s financial results are significantly restated and the Board
determines that fraud, intentional misconduct, or negligence by the Executive
caused or contributed to the need for the restatement.

     4.5 Intellectual Property. “Inventions” includes all improvements, inventions, designs,
formulas, works of authorship, trade secrets, technology, computer programs, compositions, ideas,
processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced
to practice or developed by the Executive, either alone or jointly with others, during the term of
the Executive’s employment,

9

 

including during any period prior to the date of the Plan. Except as defined in the Plan, all
Inventions that the Executive makes, conceives, reduces to practice or develops (in whole or in
part, either alone or jointly with others) during the Executive’s employment will be the sole
property of the Company to the maximum extent permitted by law.

     4.6 Remedies. Monetary damages will not be an adequate remedy for the Company in the event of
a breach or threatened breach of any provision of this Article 4 and it would be impossible for the
Company to measure damages in the event of such a breach or threatened breach. Therefore, in
addition to other rights and remedies that the Company may have, the Company shall be entitled to
an injunction preventing the Executive from any breach or threatened breach of any provision of
this Article 4, and the Executive shall waive any requirement that the Company post any bond in
connection with any such injunction.

     The existence of any claim by an Executive against the Company, except for a claim that an
Executive was terminated without Cause, shall not constitute a defense to the enforcement by the
Company of any provision of this Article 4.

     4.7 Blue Pencil. If any court determines that the covenants contained in this Article 4, or
any part hereof, are unenforceable because of the duration or geographic scope of such provision,
such court shall have the power to reduce the duration or scope of such provision, as the case may
be, to as close to the terms hereof as shall be enforceable and, in its reduced form, such
provision shall then be enforceable.

Article 5. Code Section 409A 

     5.1 The Plan is intended to comply with Code Section 409A and the interpretative guidance
thereunder, including the exceptions for short-term deferrals, separation pay arrangements,
reimbursements, and in-kind distributions, and shall be administered accordingly. The Plan shall
be construed and interpreted with such intent.

     5.2 Each payment under the Plan or any Company benefit plan is intended to be treated as one
of a series of separate payments for purposes of Code Section 409A.

     5.3 Notwithstanding anything in the Plan to the contrary, to the extent the Executive is
considered a “specified employee” (as defined in Code Section 409A) and would be entitled to a
payment during the six-month period beginning on the Executive’s date of termination that is not
otherwise excluded under Code Section 409A under the exception for short-term deferrals, separation
pay arrangements, reimbursements, in-kind distributions, or any otherwise applicable exemption, the
payment will not be made to the Executive until the earlier of the six-month anniversary of the
Executive’s date of termination or the Executive’s death and will be accumulated and paid on the
first day of the seventh month following the date of termination.

     5.4 The Company may amend the Plan to the minimum extent necessary to satisfy the applicable
provisions of Code Section 409A.

10

 

     5.5 The Company cannot guarantee that the Severance Benefits provided pursuant to the Plan
will satisfy all applicable provisions of Code Section 409A.

Article 6. Claims Procedure

     6.1 Claims Procedure. Severance Benefits shall be paid without the necessity of formal
claims. If any person believes he or she is being denied any rights or benefits under the Plan,
such person (or the person’s duly authorized representative) may file a claim in writing with the
Plan Administrator within one year following the applicable Executive’s date of termination. If
any such claim is wholly or partially denied, the Plan Administrator will notify the claimant of
its decision in writing. The notification will set forth, in a manner calculated to be understood
by the claimant, the following: (a) the specific reason or reasons for the adverse determination,
(b) reference to the specific Plan provisions on which the determination is based, (c) a
description of any additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary, and (d) a description of
the Plan’s review procedures and the time limits applicable to such procedures, including a
statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an
adverse benefit determination on review. Such notification will be given within 90 days after the
claim is received by the Plan Administrator, or within 180 days, if the Plan Administrator
determines that special circumstances require an extension of time for processing the claim. If
the Plan Administrator determines that an extension of time for processing is required, written
notice of the extension shall be furnished to the claimant prior to the termination of the initial
90-day period. The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Plan Administrator expects to render a benefit
determination.

     6.2 Review Procedure. Within 60 days after the receipt of notification of an adverse
benefit determination, a claimant (or the claimant’s duly authorized representative) may file a
written request with the Plan Administrator for a review of the claimant’s adverse benefit
determination and submit written comments, documents, records, and other information relating to
the claim for benefits. A request for review shall be deemed filed as of the date of receipt of
such written request by the Plan Administrator. A claimant shall be provided, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and other information
relevant to the claimant’s claim for benefits. The Plan Administrator will take into account all
comments, documents, records, and other information submitted by the claimant relating to the
claim, without regard to whether such information was submitted or considered in the initial
benefit determination. The Plan Administrator will notify the claimant of its decision on review
in writing. Such notification will be written in a manner calculated to be understood by the
claimant and will contain the following: (a) the specific reason or reasons for the adverse
determination, (b) reference to the specific Plan provisions on which the benefit determination is
based, (c) a statement that the claimant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other information relevant to the
claimant’s claim for benefits,

11

 

and (d) a statement of the claimant’s right to bring a civil action under ERISA Section
502(a). The decision on review will be made within 60 days after the request for review is
received by the Plan Administrator, or within 120 days if the Plan Administrator determines that
special circumstances require an extension of time for processing the claim. If the Plan
Administrator determines that an extension of time for processing is required, written notice of
the extension shall be furnished to the claimant prior to the termination of the initial 60-day
period. The extension notice shall indicate the special circumstances requiring an extension of
time and the date by which the Plan expects to render the determination on review. The Plan
Administrator’s decision on review shall be final and binding on the claimant.

Article 7. Successors 

     7.1 Successors to the Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock,
liquidation, or otherwise) of all or a significant portion of the assets of the Company by
agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to
maintain the Plan in the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place, subject to Section 9.1 hereof. Regardless of
whether such agreement is executed, the Plan shall be binding upon any successor in accordance with
the operation of law and such successor shall be deemed the “Company” for purposes of the Plan.

     7.2 Assignment by the Executive. The Plan shall inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive dies while any Severance Benefits would
still be owed to the Executive hereunder had the Executive continued to live, all such Severance
Benefits, unless otherwise provided herein, shall be paid in accordance with the terms of the Plan
to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the
Executive’s estate.

Article 8. Miscellaneous 

     8.1 Employment Status. The Plan is not a contract of employment, and participation in the
Plan does not give an Executive the right to be rehired or retained in the employ of the Company on
a full-time, part-time or any other basis, or to receive any benefit under any other plan of the
Company. Participation in the Plan does not give any Executive any right or claim or legal
entitlement to any benefit under the Plan, unless that right or claim has specifically accrued
under the terms of the Plan.

     8.2 Effect of Receiving Severance Benefits. Receipt of Severance Benefits does not constitute
any sort of extension or perpetuation of employment beyond the Executive’s actual date of
employment termination.

     8.3 Interests Not Transferable. The interests of persons entitled to Severance Benefits are
not subject to their debts or other obligations and, except as may

12

 

be required by the tax withholding provisions of the Code or any state’s income tax act, or
pursuant to an agreement between an Executive and the Company, may not be voluntarily sold,
transferred, alienated, assigned, or encumbered.

     8.4 Entire Plan. The Plan contains the entire understanding of the Company and the Executive
with respect to the subject matter hereof. The Severance Benefits under this Plan shall be in lieu
of and reduced by any severance pay or the like that may be payable under any plan or practice of
the Company, or that may be payable by any Federal, state or foreign law, statute, regulation, or
the like (including the WARN Act or any similar state or foreign law).

     8.5 Conflicting Plans. The Plan supersedes any other generally applicable severance-related
plan or policy of the Company in effect on the date the Company adopts the Plan. Payments or
benefits provided to an Executive under any Company stock, deferred compensation, savings,
retirement, or other employee benefit plan are governed solely by the terms of that plan. Any
obligations or duties of an Executive pursuant to any non-competition or other agreement with the
Company will be governed solely by the terms of that agreement, and will not be affected by the
terms of the Plan, except to the extent that agreement expressly provides otherwise. Severance
Benefits paid under the Plan are not taken into account for purposes of contributions or benefits
under any other employee benefit plans, except as expressly provided therein. Further, the period
of coverage under any employee benefit plan is not extended due to the payment of Severance
Benefits under the Plan.

     8.6 Notices. All notices, requests, demands, and other communications hereunder shall be
sufficient if in writing and shall be deemed to have been duly given if delivered by hand or if
sent by registered or certified mail to the Executive at the last address the Executive has filed
in writing with the Company or, in the case of the Company, at its principal offices.

     8.7 Tax Withholding. The Company shall withhold from any Severance Benefits payable under the
Plan all Federal, state, city, or other taxes as legally required to be withheld, as well as any
other amounts authorized or required by policy, including, but not limited to, withholding for
garnishments and judgments or other court orders. Any Severance Benefit payable under the Plan
will be offset against any severance, notice or termination pay required to be paid by the Company
pursuant to Federal, state or local law or ordinance.

     8.8 Severability. In the event any provision of the Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
Further, the captions of the Plan are not part of the provisions hereof and shall have no force and
effect.

     Notwithstanding anything in the Plan to the contrary, the Company shall have no obligation to
provide any Severance Benefits to the Executive hereunder to the extent, but

13

 

only to the extent, that such provision is prohibited by the terms of any final order of a
Federal or state court or regulatory agency of competent jurisdiction, provided that such an order
shall not affect, impair, or invalidate any provision of the Plan not expressly subject to such
order.

     8.9 Gender and Number. Except where otherwise indicated by the context, any masculine term
used herein shall include the feminine; the plural shall include the singular and the singular
shall include the plural.

     8.10 Applicable Law. To the extent not preempted by the laws of the United States, the laws
of the State of Illinois shall be the controlling law in all matters relating to the Plan without
giving effect to principles of conflicts of laws. The jurisdiction and venue for any disputes
arising under, or any action brought to enforce, or otherwise relating to, the Plan shall be
exclusively in the courts in State of Illinois, Cook County, including the Federal Courts located
therein (should Federal jurisdiction exist).

     8.11 Action by Company. Any action required of or permitted to be taken by the Company under
the Plan will be by resolution of the Board, by resolution of a duly authorized committee of the
Board, by a person or persons authorized by resolutions of the Board, or a by duly authorized
committee.

     8.12 Plan Funding. The Company will pay all Severance Benefits due and owing under the Plan
directly out of its general assets. To the extent that an Executive acquires a right to receive
Severance Benefits under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. Nothing herein contained shall require or be deemed to require,
or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any
funds or other assets, in trust or otherwise, to provide for any Severance Benefits hereunder.

     8.13 Indemnification. Each person who is or has been a member of the Board, and any
individual or individuals to whom the Company has delegated authority under Section 1.4 of the
Plan, shall be indemnified and held harmless by the Company from and against any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or her in connection
with or as a result of any claim, action, suit or proceeding to which he or she may be a party or
in which he or she may be involved by reason of any action taken, or failure to act, under the
Plan. Each such person will also be indemnified and held harmless by the Company from and against
any and all amounts paid by him or her in a settlement approved by the Company, or paid by him or
her in satisfaction of any judgment, of or in a claim, action, suit or proceeding against him or
her and described in the previous sentence, so long as he or she gives the Company an opportunity,
at its own expense, to handle and defend the claim, action, suit or proceeding before he or she
undertakes to handle and defend it. The foregoing right of indemnification will not be exclusive
of any other rights of indemnification to which a person may be entitled under the Company’s
Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify him or her or hold him or her harmless.

14

 

Article 9. Amendment and Termination

     9.1 Amendment and Termination. The Company reserves the right, on a case-by-case basis or on
a general basis, to amend the Plan at any time and to thereby alter, reduce or eliminate any
benefit under the Plan, in whole or in part, at any time. Notwithstanding the foregoing, any
amendment or termination of the Plan will not reduce the amount of benefits payable (if any) to any
Executive who terminates employment before the effective date of the amendment or termination.
Further notwithstanding the foregoing, during the two-year period following the consummation of a
Change in Control, any amendment or termination of the Plan will not reduce the amount of benefits
payable (if any) to any Executive or the rights of any Executive under the Plan, or cause any
individual who is an Executive at the time of the Change in Control to cease being an Executive,
without the express written consent of such Executive.

     9.2 Notice of Amendment or Termination. Executives receiving Severance Benefits under the
Plan will be notified of any material amendment or termination of the Plan within a reasonable
time.

15

 

Appendix A

Executives Eligible to Participate in the

FreightCar America, Inc. Executive Severance Plan

Appendix A

 

 

Appendix B

Additional Information for Summary Plan Description

This Appendix B, together with the Plan document, constitute the summary plan description of the
Plan. References in this Appendix B to “you” or “your” are references to the Executive. Any term
capitalized but not defined in this Appendix B will have the meaning set forth in the Plan.

Your Rights Under ERISA

As a participant in the Plan, you are entitled to certain rights and protections under ERISA.
ERISA provides that all Plan participants will be entitled to:

	 	•	 	Receive information about the Plan and benefits offered under the Plan.
	 
	 	•	 	Examine, without charge, at the Company’s office and at other specified locations,
all documents governing the Plan, and a copy of the latest annual report filed by the Plan
with the U.S. Department of Labor and available at the Public Disclosure Room of the
Employee Benefit Security Administration.
	 
	 	•	 	Obtain, upon written request to the Company, copies of documents governing the
operation of the Plan, and copies of the latest annual report and updated summary plan
description. The Company may make a reasonable charge for the copies.
	 
	 	•	 	Obtain a statement telling you whether you have a right to receive a benefit and, if
so, what your benefit would be if you stop working under the Plan now. If you do not have
a right to a benefit, the statement will tell you how many more years you have to work to
get a right to a benefit. This statement must be requested in writing and is not required
to be given more than once every 12 months. The Plan must provide the statement free of
charge.

Prudent Action by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are
responsible for the operation of the Plan. The people who operate your Plan, called fiduciaries of
the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including the Company, or any other person, may fire you or otherwise
discriminate against you in any way to prevent you from exercising your rights under ERISA.

Enforce Your Rights

If your claim for a benefit is denied in whole or in part, you have a right to know why this was
done, to obtain copies of documents relating to the decision without charge, and to appeal any
denial, all within certain time schedules.

Appendix B

 

 

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you
request a copy of Plan documents or the latest annual report from the Plan and do not receive them
within 30 days, you may file suit in a Federal court. In such a case, the court may require the
Plan Administrator to provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the control of the Plan
Administrator. If you have a claim for benefits that is denied or ignored, in whole or in part,
you may file suit in a state or Federal court. If you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a
Federal court. The court will decide who should pay court costs and legal fees. If you are
successful, the court may order the person you have sued to pay these costs and fees. If you lose,
the court may order you to pay these costs and fees, for example, if it finds your claim is
frivolous.

Assistance With Your Questions

If you have any questions about the Plan, you should contact the Plan Administrator. If you have
any questions about this statement or about your rights under ERISA, or if you need assistance in
obtaining documents from the Plan Administrator, you should contact the nearest office of the
Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security
Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.
You also may obtain certain publications about your rights and responsibilities under ERISA by
calling the publications hotline of the Employee Benefits Security Administration.

General Plan Information

	 	 	 
	Plan Sponsor

	 	FreightCar America, Inc.
	 

	 	Two North Riverside Plaza, Suite 1250
	 

	 	Chicago, Illinois 60606
	 
	 	 
	Plan Name

	 	FreightCar America, Inc. Executive Severance Plan
	 
	 	 
	Type of Plan

	 	Welfare plan
	 
	 	 
	Source of Funds

	 	The Company will pay all benefits due and owing under the
Plan directly out of its general assets. To the extent
that an Executive acquires a right to receive benefits
under the Plan, such right shall be no greater than the
right of an unsecured general creditor of the Company.
	 
	 	 
	Plan Number

	 	[     ]

Appendix B

 

 

	 	 	 
	Company’s Employer 

Identification Number

	 	25-1837219 
	 
	 	 
	Plan Administrator

	 	FreightCar America, Inc.
	 

	 	Two North Riverside Plaza, Suite 1250
	 

	 	Chicago, Illinois 60606
	 

	 	(312) 928-0850
	 
	 	 
	Agent for Service
of Legal Process

	 	Plan Administrator
	 
	 	 
	Plan Year

	 	Calendar Year

(January 1 — December 31)
	 
	 	 
	Controlling Law

	 	Illinois, to the extent not preempted by Federal law

Appendix B

 

 

FREIGHTCAR AMERICA, INC.

EXECUTIVE SEVERANCE PLAN

ACKNOWLEDGMENT AND ACCEPTANCE OF

THE TERMS AND CONDITIONS OF THE PLAN

     FreightCar America, Inc. (the “Company”) has established the FreightCar America, Inc.
Executive Severance Plan (the “Plan”). The Plan provides severance benefits to certain eligible
executives in the event of employment termination by the Company without “cause,” or termination by
the executive for “good reason” (each as defined in the Plan). You are eligible to participate in
the Plan.

     By the signatures below of the representative of the Company and the Executive named herein,
the Company and the Executive agree that the Company hereby designates the Executive as eligible to
participate in the Plan, and the Executive hereby acknowledges and accepts such participation,
subject to the terms and conditions of the Plan, and agrees to the terms of the Plan, which is
attached hereto and made a part hereof.

     Name of Executive: «FirstName» «LastName»

     Date of Eligibility and Participation: «Date_2»

     At Will Employment. Nothing in this Acknowledgement and Acceptance or in the Plan
shall confer upon the Executive any right to continue in employment for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the Company or of the
Executive, which rights are hereby expressly reserved by each, to terminate the Executive’s
employment at any time for any reason.

     The Company reserves the right to amend or terminate the Plan at any time prior to a Change in
Control, including an amendment that would alter, reduce or eliminate benefits under the Plan,
except that no amendment or termination of the Plan would reduce the amount of benefits payable (if
any) to any Executive who terminates employment before the effective date of the amendment or
termination.

	 	 	 	 	 	 
	EXECUTIVE:	 	FREIGHTCAR AMERICA, INC.

	 
	 	 	 	 
	 

	 	By: 	 	 
	[Signature]

	 	 	 
 
	 

	 	Title: 	 
	 

	 	 	 	 
 

Attachment:

FreightCar America, Inc. Executive Severance Plan

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