AMENDMENT NO. 7 TO LOAN AGREEMENT

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Exhibit 10.40

AMENDMENT NO. 7 TO LOAN AGREEMENT

        THIS AMENDMENT NO. 7 TO LOAN AGREEMENT (this "Amendment"), dated and effective as of December 19, 2008, is entered into by and between Union Bank of California, N.A. ("Bank") and Crocs, Inc., a Delaware corporation ("Borrower"), with reference to the following facts:

RECITALS

        A.    Borrower and Bank are parties to that certain Loan Agreement, dated as of May 8, 2007 (as heretofore amended, the "Loan Agreement"), pursuant to which Bank has provided Borrower with certain credit facilities.

        B.    Borrower has requested that Bank amend the Loan Agreement as set forth below.

        C.    Bank is willing to grant such amendment on the terms and conditions set forth below.

        NOW THEREFORE, in consideration of the amendment and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

        1.     Initially capitalized terms used in this Amendment (including without limitation in the recitals hereto) without definition shall have the respective meanings given thereto in the Loan Agreement.

        2.     The sentence in Section 1.1.1 of the Loan Agreement which reads as follows: "The Committed Loan shall be repaid on or before December 31, 2008, at which time all unpaid principal and interest on the Committed Loan shall be due and payable," hereby is amended and restated in its entirety to read as follows: "The Committed Loan shall be repaid on or before February 16, 2009, at which time all unpaid principal and interest on the Committed Loan shall be due and payable."

        3.     Bank shall refer to Borrower two (2) consultants for the purpose of verifying Borrower's cash flow and borrowing base projections; Borrower shall, at Borrower's expense, engage one (1) such consultant no later than January 12, 2009, and such consultant shall deliver to Bank, in form and content reasonably acceptable to Bank, verification of Borrower's cash flow and borrowing base projections, by no later than February 10, 2009.

        4.     Borrower shall, at Borrower's expense, engage Great American Appraisal no later than January 5, 2009, and Great American shall deliver to Bank, in form and content reasonably acceptable to Bank, an appraisal of Borrower's domestic inventory, by no later than February 10, 2009.

        5.     Bank hereby suspends Borrower's delivery to Bank of Borrower's projected weekly cash flow statement and borrowing base certificate otherwise due for the last two (2) weeks of December, 2008, until January 5, 2009, at which time Borrower shall deliver the same to Bank. Such projections and borrowing base certificate shall be in form and content reasonably acceptable to Bank.

        6.     The effectiveness of this Amendment shall be subject to the prior satisfaction of each of the following conditions:

        (a)   Bank shall have received an original of this Amendment, duly executed by Borrower; and

        (b)   Bank shall have received an original of that certain Intellectual Property Security Agreement, in form and content reasonably acceptable to Bank, duly executed by Borrower; and

        (c)   Borrower shall have executed and delivered to Bank an amended and restated Committed Note and such other documents and instruments as Bank may reasonably request; and

        (d)   Borrower shall have paid Bank all legal fees and expenses incurred in connection with this Amendment, which may be debited from any of Borrower's accounts with Bank.

        7.     All representations and warranties made in the Loan Agreement or in any other documents or instruments relating thereto, including without limitation any Loan Documents furnished in connection

with this Amendment, after giving effect to this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and nothing shall affect the representations and warranties or the right of Bank to rely thereon.

        8.     Borrower is not aware of any events which now constitute, or with the passage of time or the giving of notice, or both, would constitute, an Event of Default under the Loan Agreement as amended by this Amendment.

        9.     The Loan Agreement, each of the other Loan Documents, and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms of this Amendment, or pursuant to the terms of the Loan Agreement as amended hereby, are hereby amended so that any reference therein to the Loan Agreement shall mean a reference to the Loan Agreement as amended hereby.

        10.   The Loan Agreement and the other Loan Documents remain in full force and effect and Borrower herby ratifies and confirms its agreements and covenants contained therein. Borrower hereby confirms that, after giving effect to this Amendment, no Event of Default exists as of the date hereof.

        11.   Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

        12.   THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

        13.   This Amendment is binding upon and shall inure to the benefit of Bank and Borrower and their respective successors and assigns; provided that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Bank.

        14.   This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.

        15.   THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT BETWEEN BANK AND BORROWER AS TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN BANK AND BORROWER.

[ Balance of Page Intentionally Left Blank ]

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        IN WITNESS WHEREOF, the parties hereto have entered into this Amendment by their respective duly authorized officers as of the date first above written.

[ Signature Page to Amendment No. 7 to Loan Agreement ]

[ Acknowledgement Page to Amendment No. 7 to Loan Agreement ]

INTELLECTUAL PROPERTY SECURITY AGREEMENT

        This Intellectual Property Security Agreement (the "Agreement") is made as of December 19, 2008, by and between Crocs, Inc., a Delaware corporation ("Grantor"), and Union Bank, N.A. (formerly known as Union Bank of California, N.A.; "Secured Party").

RECITALS

        A.    Secured Party has agreed to make certain advances of money and to extend certain financial accommodations to Grantor (the "Loans") in the amounts and manner set forth in that certain Loan Agreement, dated as of May 8, 2007 (as amended from time to time, including by that certain Amendment No. 7 to Loan Agreement of even date herewith, the "Loan Agreement"). All capitalized terms used herein without definition shall have the meanings ascribed to them in the Loan Agreement)

        B.    Secured Party is willing to make the Loans to Grantor, but only upon the condition, among others, that Grantor shall grant to Secured Party a security interest in all of Grantor's right title, and interest in, to and under all of the Collateral whether presently existing or hereafter acquired.

NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

        1.      Grant of Security Interest .    As collateral security for the prompt and complete payment and performance of all of Grantor's present or future indebtedness, obligations and liabilities to Secured Party, Grantor hereby grants a security interest and mortgage to Secured Party, as security, in and to Grantor's entire right, title and interest in, to and under all of its intellectual property, including without limitation the following (all of which shall collectively be called the "Collateral"):

        (a)   Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held;

        (b)   Any and all design rights which may be available to Grantor now or hereafter existing, created, acquired or held;

        (c)   All patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations in part of the same, including without limitation the patents and patent applications set forth on Exhibit A attached hereto (collectively, the "Patents");

        (d)   Any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Grantor connected with and symbolized by such trademarks, including without limitation those set forth on Exhibit B attached hereto (collectively, the "Trademarks");

        (e)   Any and all claims for damages by way of past, present and future infringement of any of the rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above;

        (f)    All licenses or other rights to use any of the Trademarks or Patents, and all license fees and royalties arising from such use to the extent permitted by such license or rights;

        (g)   All amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and

        (h)   All proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing. Secured Party understands and agrees that Grantor may from time to time abandon or fail to renew elements of the Collateral for reasons that are in the best interest of the company and its business as determined in Grantor's good faith business judgment. Such Collateral will be, upon written

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request from and at the sole expense of Grantor, released as Collateral by Secured Party without penalty to Grantor.

        2.      Covenants and Warranties .    Grantor represents, warrants, covenants and agrees as follows:

        (a)   Grantor or its subsidiaries are now the sole owner of the Collateral, except for licenses granted by Grantor and or its corporate subsidiary entities to its customers in the ordinary course of business;

        (b)   Except as set forth in the Schedule, Grantor's rights as a licensee of intellectual property do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or disposition of any product or service;

        (c)   Performance of this Agreement does not conflict with or result in a breach of any agreement to which Grantor is party or by which Grantor is bound;

        (d)   During the term of this Agreement, Grantor will not transfer or otherwise encumber any interest in the Collateral, except for licenses granted by Grantor to its affiliated entities or in the ordinary course of business or as set forth in this Agreement;

        (e)   To its knowledge, except as set forth on the schedule attached hereto, each of the Patents is valid and enforceable, and no part of the Collateral has been judged invalid or unenforceable, in whole or in part, and no claim has been made that any part of the Collateral violates the rights of any third party;

        (f)    Grantor shall deliver to Secured Party within thirty (30) days of the last day of each fiscal quarter, a report signed by Grantor, in form reasonably acceptable to Secured Party, listing any applications or registrations that Grantor has made or filed in respect of any patents or trademarks and the status of any outstanding applications or registrations and a list of any patents or trademarks that have been abandoned or have not been renewed. Grantor shall promptly advise Secured Party of any material change in the composition of the Collateral, including but not limited to any subsequent ownership right of the Grantor in or to any Trademark or Patent not specified in this Agreement;

        (g)   Except as otherwise specifically set forth herein, Grantor shall use commercially reasonable efforts (including consistent with Grantor's past practice) to (i) protect, defend and maintain the validity and enforceability of the Trademarks and Patents (ii) detect infringements of the Trademarks and Patents and promptly advise Secured Party in writing of material infringements detected and (iii) not allow any Trademarks or Patents to be abandoned, forfeited or dedicated to the public without the written consent of Secured Party, which shall not be unreasonably withheld;

        2.2   Grantor shall register or cause to be registered (to the extent not already registered) with the United States Patent and Trademark Office those registerable intellectual property rights now owned or hereafter developed or acquired by Grantor to the extent that Grantor, in its reasonable business judgment, deems it appropriate to so protect such intellectual property rights;

        2.3   Grantor shall, on a quarterly basis, give Secured Party written notice of any applications or registrations of intellectual property rights filed with the United States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any;

        2.4   Secured Party may audit the Collateral to confirm compliance with this Section, provided such audit may not occur more often than twice per year, unless an Event of Default has occurred and is continuing;

        2.5   This Agreement creates, and in the case of after acquired Collateral, this Agreement will create at the time Grantor first has rights in such after acquired Collateral, in favor of Secured Party a

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valid and perfected first priority security interest in the Collateral in the United States securing the payment and performance of the obligations evidenced by the Loan Documents;

        2.6   All information heretofore, herein or hereafter supplied to Secured Party by or on behalf of Grantor with respect to the Collateral is accurate and complete in all material respects;

        2.7   Grantor shall not enter into any agreement that would materially impair or conflict with Grantor's obligations hereunder without Secured Party's prior written consent, which consent shall not be unreasonably withheld. Grantor shall not permit the inclusion in any material contract to which it becomes a party of any provisions that could or might in any way prevent the creation of a security interest in Grantor's rights and interests in any property included within the definition of the Collateral acquired under such contracts; and

        2.8   Upon any executive officer of Grantor obtaining actual knowledge thereof, Grantor will promptly notify Secured Party in writing of any event that materially adversely affects the value of any Collateral, the ability of Grantor to dispose of any Collateral or the rights and remedies of Secured Party in relation thereto, including the levy of any legal process against any of the Collateral.

        3.      Secured Party's Rights.     Secured Party shall have the right, but not the obligation, to take, at Grantor's sole expense, any actions that Grantor is required under this Agreement to take but which Grantor fails to take, after fifteen (15) days' notice to Grantor. Grantor shall reimburse and indemnify Secured Party for all reasonable costs and reasonable expenses incurred in the reasonable exercise of its rights under this section 3.

        4.      Inspection Rights .    Grantor hereby grants to Secured Party and its employees, representatives and agents the right to visit, during reasonable hours upon prior reasonable written notice to Grantor, any of Grantor's plants and facilities that manufacture, install or store products (or that have done so during the prior six month period) that are sold utilizing any of the Collateral, and to inspect the products and quality control records relating thereto upon reasonable written notice to Grantor and as often as may be reasonably requested.

        5.      Further Assurances; Attorney in Fact.

        (a)   On a continuing basis, Grantor will make, execute, acknowledge and deliver, and file and record in the proper filing and recording places in the United States, all such instruments, including appropriate financing and continuation statements and collateral agreements and filings with the United States Patent and Trademark Office, and take all such action as may reasonably be deemed necessary or advisable, or as requested by Secured Party, to perfect Secured Party's security interest in all Patents and Trademarks and otherwise to carry out the intent and purposes of this Agreement, or for assuring and confirming to Secured Party the grant or perfection of a security interest in all Collateral.

        (b)   Grantor hereby irrevocably appoints Secured Party as Grantor's attorney in fact, with full authority in the place and stead of Grantor and in the name of Grantor, from time to time in Secured Party's discretion, to take any action and to execute any instrument which Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including (i) to modify, in its sole discretion, this Agreement without first obtaining Grantor's approval of or signature to such modification by amending Exhibit A and Exhibit B , he