CREDIT AGREEMENT

Exhibit 10.1

CREDIT AGREEMENT

Dated as of July 31, 2009

among

QUIKSILVER AMERICAS, INC.,
as Borrower

QUIKSILVER, INC.,
as a Guarantor

RHÔNE GROUP L.L.C.,
as Administrative Agent

and

The Lenders Party Hereto

RHÔNE GROUP L.L.C.,
as Sole Lead Arranger and Sole Bookrunner

TABLE OF CONTENTS

CREDIT AGREEMENT

          This CREDIT AGREEMENT is entered into as of July 31, 2009, among QUIKSILVER AMERICAS, INC., a California corporation (the “ Borrower ”); QUIKSILVER, INC., a Delaware corporation (the “ Parent ”); each lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”); and RHÔNE GROUP L.L.C., as Administrative Agent.

          The Borrower has requested that the Lenders provide a term loan facility, and the Lenders have indicated their willingness to provide a term loan facility on the terms and conditions set forth herein.

          In consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

          1.01 Defined Terms . As used in this Agreement, the following terms shall have the meanings set forth below:

          “ 54th Street ” means 54th Street Holdings S.à r.l., a Luxembourg private limited liability company, having its registered office at 9-11 rue Louvigny, L-1946 Luxembourg, and being registered with the Luxembourg trade and companies registry under number B 147.206.

          “ ABL Agent ” means Bank of America, N.A., in its capacity as administrative agent for the lenders under the ABL Credit Agreement, together with any successor agent.

          “ ABL Credit Agreement ” means that certain Credit Agreement dated as of the Closing Date among the Borrower, the other borrowers party thereto, the Parent, the other guarantors party thereto, the lenders party thereto, the ABL 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.

          “ ABL Facility ” means the credit facilities made available pursuant to the ABL Credit Agreement.

          “ ABL Intercreditor Agreement ” means that certain Intercreditor Agreement, dated as of the Closing Date, among the Administrative Agent, the Euro Term Loan Agent, the ABL Agent and the Collateral Agent.

          “ Acquisition ” means, with respect to any Person, (a) an investment in, or a purchase of a Controlling interest in, the Equity Interests of any other Person, (b) a purchase or other acquisition of all or substantially all of the assets or properties of, another Person or of any business unit of another Person, or (c) any merger or consolidation of such Person with any other Person or other transaction or series of transactions resulting in the acquisition of all or substantially all of the assets, or a Controlling interest in the Equity Interests, of any Person.

          “ Administrative Agent ” means Rhône Group L.L.C., in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

          “ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 , or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.

          “ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

          “ Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

          “ Aggregate Commitments ” means the Commitments of all the Lenders. As of the Closing Date, the Aggregate Commitments are $125,000,000.

          “ Agreement ” means this Credit Agreement.

          “ Americas Consolidated ” means, when used to modify a financial term, test, statement, or report of the Parent, the application or preparation of such term, test, statement or report (as applicable) based upon the financial condition or operating results of the Parent and the Americas Subsidiaries, calculated or prepared (as the case may be) as if such entities were a consolidated group.

          “ Americas Consolidated EBITDA ” means, at any date of determination, an amount equal to Americas Consolidated Net Income for the most recently completed Measurement Period, plus (a) without duplication and to the extent deducted in calculating such Americas Consolidated Net Income, the sum of: (i) Americas Consolidated Interest Charges for such Measurement Period, (ii) the provision for federal, state, local and foreign income Taxes for such Measurement Period, (iii) amounts attributable to depreciation and amortization expense for such Measurement Period, (iv) all non-cash charges, expenses or losses, including any impairment charge or write-off of assets (other than the write-off or write-down of current assets) pursuant to GAAP, (v) any non-cash stock compensation expenses, (vi) costs, fees and expenses in connection with the Loan Documents, the ABL Facility and the Euro Term Loans and the other transactions occurring on or about the Closing Date, (vii) costs, fees and expenses in connection with any Acquisition or Disposition permitted hereunder and occurring after the Closing Date, (viii) any expenses or charges incurred in connection with any issuance (or proposed issuance) of Indebtedness or Equity Interests or any refinancing transaction (or proposed refinancing transaction) or any amendment or other modification (or proposed amendment or modification) of any Indebtedness, and (ix) non-recurring costs, fees and expenses of restructuring advisors, in each case of or by the Parent and the Americas Subsidiaries for such Measurement Period, minus (b) without duplication all cash payments made during such period on account of reserves, restructuring charges and other non-cash charges added to Americas Consolidated Net Income pursuant to clause (a)(iv) above in respect of a previous Measurement Period. For the purposes of calculating Americas Consolidated EBITDA for any Measurement Period, (i) the Americas Consolidated EBITDA of any Person acquired by the Parent or its Americas Subsidiaries during such Measurement Period shall be included on a pro forma basis for such period (assuming the consummation of such Acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred on the first day of such Measurement Period, but excluding any adjustments giving effect to expected costs savings or synergies), and (ii) the Americas Consolidated EBITDA of any Person Disposed of by the Parent or its Americas Subsidiaries during such Measurement Period shall be excluded for such Measurement Period (assuming the consummation of such Disposition and the repayment of any Indebtedness in connection therewith occurred on the first day of such period).

          “ Americas Consolidated Interest Charges ” means, for any Measurement Period and without duplication, the sum of (a) all interest expense, premium payments amortization, debt discount amortization, fees amortization, charges and related expenses amortization, in each case to the extent treated as interest expense in accordance with GAAP, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs or net gains under Swap Contracts to the extent such net costs or net gains are allocable to such period, and (b) the portion of rent expense with respect to such period under Capital Lease Obligations that is treated as interest in accordance with GAAP, in each case of or by the Parent and its Americas Subsidiaries for the most recently completed Measurement Period, all as determined on an Americas Consolidated basis.

          “ Americas Consolidated Net Income ” means, as of any date of determination, the net income of the Parent and its Americas Subsidiaries for the most recently completed Measurement Period, all as determined on an Americas Consolidated basis in accordance with GAAP (other than with respect to standards requiring or otherwise related to inclusion of Subsidiaries other than Americas Subsidiaries); provided , however , that there shall be excluded (a) items classified as unusual, non-recurring or extraordinary gains or losses (and the tax effects of such items) for such Measurement Period, (b) gains and losses realized upon the sale or other disposition of any property that is not sold or otherwise disposed of in the ordinary course of business (and the tax effects of such sale), (c) the cumulative effect of a change in accounting principles, (d) the income (or loss) of such Person which is not a Loan Party or a Subsidiary during such Measurement Period in which any other Person has a joint interest with a Loan Party or any of its Subsidiaries, except to the extent of the amount of cash dividends or other distributions actually paid in cash to such Person during such period, and (e) the income (or loss) of such Person during such Measurement Period and accrued prior to the date it becomes a Subsidiary of a Person or any of such Person’s Subsidiaries or is merged into or consolidated with a Person or any of its Subsidiaries or that Person’s assets are acquired by such Person or any of its Subsidiaries.

          “ Americas Leverage Ratio ” means, as of any date of determination, the ratio of (a) without duplication, the aggregate outstanding principal amount of all Indebtedness of the Parent and its Americas Subsidiaries described in clauses (a), (b), (d), (e), (f), (g) and (h) of the definition of “Indebtedness” on such date (including such items that are Permitted Specified Subsidiary Indebtedness), determined on an Americas Consolidated basis, to (b) Americas Consolidated EBITDA for the most recently ended Measurement Period.

          “ Americas Subsidiaries ” means, collectively, (a) the Borrower and each direct or indirect Domestic Subsidiary of the Borrower, (b) the European Borrower and each direct or indirect Subsidiary of the European Borrower organized under the laws of Canada or any province thereof, (c) QS Mexico Holdings and each direct or indirect Subsidiary of QS Mexico Holdings organized under the laws of Mexico and (d) each direct or indirect Subsidiary of the Parent organized under the laws of Brazil. For the avoidance of doubt, as of the Closing Date, each of Quiksilver Canada Corp., QS Retail Canada Corp., Quiksilver Brazil, Quiksilver Industria e Comercio de Artigos Esportivos Ltda., QS Mexico Holdings, Quiksilver Mexico, S. de R. L. de C.V. and Quiksilver Mexico Service, S. de R. L. de C.V. shall be deemed an “Americas Subsidiary”.

          “ Applicable Percentage ” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) obtained by dividing (x) the outstanding principal balance of such Lender’s Loans by (y) the aggregate outstanding principal balance of the Loans.

          “ Arranger ” means Rhône Group L.L.C., in its capacity as sole lead arranger.

          “ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b) ), and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other form approved by the Administrative Agent.

          “ Attributable Indebtedness ” means, on any date, (a) in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation (other than any Capital Lease Obligation), the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease, agreement or instrument were accounted for as a capital lease.

          “ Audited Financial Statements ” means the audited Consolidated balance sheet of the Parent and its Subsidiaries for the Fiscal Year ended October 31, 2008, and the related Consolidated statements of income or operations and cash flows for such Fiscal Year of the Parent and its Subsidiaries, including the notes thereto.

          “ Borrower ” has the meaning specified in the introductory paragraph hereto.

          “ Borrowing ” means the borrowing of Loans made by the Borrower pursuant to Section 2.01 .

          “ Brazil JV Agreement ” means the Joint Venture Agreement of Quiksilver Brazil dated November 1, 2004 by and among QS Holdings, Alfio Lagnado and With Quik, LLC, as amended.

          “ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York.

          “ Capital Lease Obligations ” means, with respect to any Person for any period, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP and the amount of which obligations shall be the capitalized amount thereof determined in accordance with GAAP.

          “ CFC ” means (a) a Subsidiary that is a controlled foreign corporation under Section 957 of the Code, (b) a Subsidiary substantially all of the assets of which consist of Equity Interests in Subsidiaries described in clause (a) of this definition, or (c) an entity treated as disregarded for United States federal income tax purposes that owns more than 66% of the voting Equity Interests of a Subsidiary described in clauses (a) or (b) of this definition.

          “ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

          “ Change of Control ” means:

          (a) 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), directly or indirectly, of more than 35% of the Equity Interests of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis; or

          (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Parent cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or

          (c) the Parent fails at any time to own, directly or indirectly, 100% of the Equity Interests of the Borrower free and clear of all Liens (other than (i) Liens under the Security Documents, (ii) Liens securing obligations in respect of the Euro Term Loan Credit Agreement and the loan documents relating thereto and (ii) Liens securing obligations in respect of the ABL Facility), except where such failure is as a result of a transaction permitted by the Loan Documents.

          “ Closing Date ” means July 31, 2009.

          “ Code ” means the Internal Revenue Code of 1986, and the regulations promulgated thereunder, as amended and in effect.

          “ Collateral ” means any and all “Collateral” as defined in any applicable Security Document and all other property of any Loan Party that is or is intended under the terms of the Security Documents to be subject to Liens in favor of the Administrative Agent (for the benefit of itself and the other Credit Parties) or the Collateral Agent (for the benefit of the Credit Parties).

          “ Collateral Agency Agreement ” means that certain Collateral Agency Agreement dated as of the Closing Date among the Administrative Agent, the Euro Term Loan Agent and the Collateral Agent.

          “ Collateral Agent ” means Rhône Group L.L.C., in its capacity as collateral sub-agent for the Administrative Agent and the Euro Term Loan Agent.

          “ Commitment ” means, as to each Lender, its obligation to make Loans to the Borrower pursuant to Section 2.01 in an aggregate principal amount equal to the amount set forth opposite such Lender’s name on Schedule 2.01 .

          “ Compliance Certificate ” means a certificate substantially in the form of Exhibit C .

          “ Consent ” means (a) actual written consent given by a Lender from whom such consent is sought; or (b) the passage of ten (10) Business Days from receipt of written notice to a Lender from the

Administrative Agent of a proposed course of action to be followed by the Administrative Agent without such Lender’s giving the Administrative Agent written notice that such Lender objects to such course of action.

          “ Consolidated ” means, when used to modify a financial term, test, statement, or report of a Person, the application or preparation of such term, test, statement or report (as applicable) based upon the consolidation, in accordance with GAAP, of the financial condition or operating results of such Person and its Subsidiaries.

          “ Contractual Obligation ” means, as to any Person, any provision of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

          “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “ Copyright ” has the meaning specified in the Intellectual Property Security Agreement.

          “ Copyright Security Agreement ” means the Copyright Security Agreement dated as of the Closing Date among certain Loan Parties and the Collateral Agent, in substantially the form attached hereto as Exhibit I or otherwise in a form reasonably satisfactory to the Administrative Agent.

          “ Credit Party ” or “ Credit Parties ” means (a) individually, (i) each Lender, (ii) the Administrative Agent, (iii) the Collateral Agent, (iv) the Arranger, (v) each beneficiary of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (vi) the successors and assigns of each of the foregoing, and (b) collectively, all of the foregoing.

          “ Credit Party Expenses ” means: all reasonable and documented out-of-pocket expenses incurred by any of the Administrative Agent, the Collateral Agent, the Arranger and their respective Affiliates and the Lenders, in connection with this Agreement and the other Loan Documents, including, without limitation (but, in any event, subject to the limitations described herein below): (a) the reasonable and documented fees, charges and disbursements of (i) counsel for the Administrative Agent, the Collateral Agent and the Arranger (limited to not more than one primary counsel and necessary local counsel (limited to one local counsel per jurisdiction)), (ii) outside consultants for the Administrative Agent and the Collateral Agent, and (iii) all such out-of-pocket expenses incurred during any workout or restructuring negotiations in respect of the Obligations, and (b) all reasonable and documented out-of-pocket expenses incurred in connection with (i) the preparation, negotiation, administration, management, execution and delivery of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) the enforcement or protection of their rights in connection with this Agreement or the other Loan Documents or efforts to preserve, protect, collect, or enforce the Collateral or in connection with any proceeding under any Debtor Relief Laws, or (iii) any workout or restructuring negotiations in respect of any Obligations; provided that, notwithstanding anything to the contrary contained herein, the aggregate amount included in the definition of Credit Party Expenses on account of fees of Lazard Frères & Co. and its Affiliates shall be limited to $1,500,000 (excluding reasonable and documented fees of Lazard Frères & Co. and its Affiliates incurred by the Administrative Agent, the Collateral Agent, the Arranger and their respective Affiliates while an Event of Default exists or in connection with any amendment or waiver of this Agreement, the Euro Term Loan Credit Agreement or the French Credit Agreement).

          “ DC Shoes ” means DC Shoes, Inc., a California corporation.

          “ DC Shoes Business ” means the business conducted by DC Shoes, Emerald Coast and DC Shoes Australia Pty. Ltd.

          “ Debtor Relief Laws ” means the Bankruptcy Code of the United States, 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 or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

          “ Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

          “ Default Rate ” means, with respect to any Loan, an interest rate equal to the interest rate otherwise applicable to such Loan plus two percent (2%) per annum.

          “ Defaulting Lender ” means any Lender that (a) has failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (b) has been deemed insolvent or become the subject of any proceeding under any Debtor Relief Law.

          “ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction (whether in one transaction or in a series of transactions) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, provided , however , that dispositions of assets (other than licenses) in a single transaction or series of related transactions with an aggregate fair market value in any fiscal year of less than $2,500,000 (with unused amounts in any fiscal year being carried over to the next succeeding fiscal year subject to a maximum of $5,000,000 in such next succeeding fiscal year) shall not be deemed to be a Disposition.

          “ Disqualified Stock ” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable (other than solely for Equity Interests that do not constitute Disqualified Stock), pursuant to a sinking fund obligation or otherwise, or redeemable (other than solely for Equity Interests that do not constitute Disqualified Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the Maturity Date; provided , however , that (i) only the portion of such Equity Interests which so matures or is so mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock and (ii) with respect to any Equity Interests issued to any employee or to any plan for the benefit of employees of the Parent or its Subsidiaries or by any such plan to such employees, such Equity Interest shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Parent or one of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, resignation, death or disability and if any class of Equity Interest of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of an Equity Interest that is not Disqualified Stock, such Equity Interests shall not be deemed to be Disqualified Stock. Notwithstanding the preceding sentence, any Equity Interest that would constitute Disqualified Stock solely because the holders thereof have the right to require a Loan Party to repurchase such Equity Interest upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement will be the

maximum amount that any Loan Party may become obligated to pay upon maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock or portion thereof, plus accrued dividends.

          “ Dollar Equivalent Amount ” has the meaning specified in Section 10.15 .

          “ Dollars ” and “ $ ” mean lawful money of the United States.

          “ Domestic Availability ” has the meaning specified in the ABL Credit Agreement.

          “ Domestic Subsidiary ” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

          “ EC Insolvency Regulation ” has the meaning specified in Section 5.01 .

          “ Eligible Assignee ” means (a) a Lender or any of its Affiliates; (b) any investment vehicle Controlled by Rhône Capital III L.L.C. and any limited partner (or affiliate of such limited partner) of any such investment vehicle; and (c) any other Person (other than a natural person) approved by (i) the Administrative Agent and (ii) the Borrower (each such approval not to be unreasonably withheld or delayed).

          “ Emerald Coast ” means Emerald Coast SAS.

          “ Environmental Laws ” means any and all federal, state, local, and foreign statutes, laws, including established common law, regulations, ordinances, judgments, orders, decrees, governmental restrictions or requirements of any Governmental Authority regulating pollution or the protection of heath or the environment or the release of any Hazardous Materials into the environment.

          “ Environmental Liability ” means any liability, obligation, damage, loss, claim, action, suit, judgment, order, fine, penalty, fee, expense, or cost (including any liability for costs of environmental remediation) of the Parent or any of its Subsidiaries arising from or based upon violation of or liability under any Environmental Law including those resulting from (a) the generation, use, handling, transportation, storage, treatment or disposal or presence of any Hazardous Materials, (b) exposure to any Hazardous Materials, or (c) the release or threatened release of any Hazardous Materials into the environment.

          “ Environmental Permit ” means any permit, approval, license or other authorization required under any Environmental Law.

          “ Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, and all of the warrants or options for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person (including partnership, member or trust interests therein), whether voting or nonvoting.

          “ ERISA ” means the Employee Retirement Income Security Act of 1974.

          “ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with a Loan Party within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

          “ ERISA Event ” means (a) a Reportable Event with respect to a Plan; (b) a withdrawal by a Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan

year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by a Loan Party or any ERISA Affiliate from a Multiemployer Plan subject to Title IV of ERISA or notification that a Multiemployer Plan subject to Title IV of ERISA is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Loan Party or any ERISA Affiliate.

          “ Euro Term Loan Agent ” means Rhône Group L.L.C., in its capacity as agent for the lenders under the Euro Term Loan Credit Agreement, together with any successor agent.

          “ Euro Term Loan Credit Agreement ” means that certain Credit Agreement dated as of the Closing Date among the Parent, the European Borrower, the lenders party thereto and the Euro Term Loan Agent, and any refinancings, refundings, renewals or extensions thereof permitted hereunder.

          “ Euro Term Loans ” means the term loans in the original principal amount of € 20,000,000 made pursuant to the Euro Term Loan Credit Agreement, together with all interest paid in kind, if any, that has been added to the principal balance of such loans.

          “ European Borrower ” means Mountain & Wave S.à r.l., a Luxembourg private limited liability company.

          “ Euros ” and “ € ” mean the single currency of the Participating Member States.

          “ Event of Default ” has the meaning specified in Section 8.01 .

          “ Exchange Rate Make-Whole Payment ” has the meaning specified in Section 2.09 .

          “ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, any Participant or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder, any (a) taxes imposed on or measured by its overall net income or net profits (however denominated), and any franchise, excise or similar taxes imposed on it in lieu of a net income tax by the taxing authority of any jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender or any Participant, in which its applicable Lending Office is located, in each case as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the tax, (b) branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction, and (c) taxes imposed on amounts payable to such Lender or Participant (x) at the time such Lender or Participant becomes a party to this Agreement (or designates a new Lending Office) or (y) is attributable to such Lender’s or Participant’s failure or inability to comply with its obligations under Section 3.01 , other than (A) additional United States federal withholding taxes that may be imposed after the time such Lender or Participant becomes a party to the Agreement (or designates a new lending office) as a result of a Change in Law, and (B) in the case of any assignment or transfer by a Lender or Participant, to the extent that such assignor was entitled, at the time of assignment, to receive a Gross-Up Payment pursuant to Section 3.01(a) ; provided , however , that such assignee shall not be entitled to receive any additional amounts pursuant to Section 3.01 in excess of the amount that such assignor would have been entitled to receive in the absence of such assignment or transfer.

          “ Executive Order ” has the meaning specified in Section 10.20 .

          “ Existing Credit Agreement ” means that certain Amended and Restated Credit Agreement dated as of June 3, 2005, among, inter alia , the Borrower, the Parent, the several banks and other financial institutions party thereto, Bank of America, N.A., as documentation agent, Union Bank of California, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent, as amended.

          “ Facility Guaranty ” means a Guarantee of the Obligations made by a Guarantor in favor of the Administrative Agent and the other Credit Parties, in substantially the form attached hereto as Exhibit E or otherwise in a form reasonably satisfactory to the Administrative Agent.

          “ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) quoted for such day on such transactions by three Federal funds brokers of recognized standing selected by the Administrative Agent.

          “ Fiscal Month ” means any fiscal month of any Fiscal Year, which month shall generally end on the last day of each calendar month in accordance with the fiscal accounting calendar of the Loan Parties.

          “ Fiscal Quarter ” means any fiscal quarter of any Fiscal Year, which quarters shall generally end on the last day of each January, April, July and October of such Fiscal Year in accordance with the fiscal accounting calendar of the Loan Parties.

          “ Fiscal Year ” means any period of twelve (12) consecutive months ending on October 31 ^st of any calendar year.

          “ Foreign Assets Control Regulations ” has the meaning specified in Section 10.20 .

          “ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

          “ Foreign Subsidiary ” means each Subsidiary other than a Domestic Subsidiary.

          “ French Credit Agreement ” means the Facilities Agreement dated as of July 31, 2009 among, inter alia , Pilot SAS, a Société par Actions Simplifiée , and Na Pali, a Société par Actions Simplifiée , as borrowers, the Parent and Pilot SAS, as original guarantors, and Crédit Lyonnais, BNP Paribas and Société Générale Corporate & Investment Banking, as mandated lead arrangers, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

          “ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards

Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

          “ Global Consolidated EBITDA ” means, at any date of determination, an amount equal to Global Consolidated Net Income of the Parent and its Subsidiaries on a Consolidated basis for the most recently completed Measurement Period, plus (a) without duplication and to the extent deducted in calculating such Global Consolidated Net Income, the sum of: (i) Global Consolidated Interest Charges for such Measurement Period, (ii) the provision for federal, state, local and foreign income Taxes for such Measurement Period, (iii) amounts attributable to depreciation and amortization expense for such Measurement Period, (iv) all non-cash charges, expenses or losses, including any impairment charge or write-off of assets (other than the write-off or write-down of current assets) pursuant to GAAP, (v) any non-cash stock compensation expenses, (vi) costs, fees and expenses in connection with the Loan Documents, the ABL Facility and the Euro Term Loans and the other transactions occurring on or about the Closing Date, (vii) costs, fees and expenses in connection with any Acquisition or Disposition permitted hereunder and occurring after the Closing Date, (viii) any expenses or charges incurred in connection with any issuance (or proposed issuance) of Indebtedness or Equity Interests or any refinancing transaction (or proposed refinancing transaction) or any amendment or other modification (or proposed amendment or modification) of any Indebtedness, and (ix) non-recurring costs, fees and expenses of restructuring advisors, in each case of or by the Parent and its Subsidiaries for such Measurement Period, minus (b) without duplication all cash payments made during such period on account of reserves, restructuring charges and other non-cash charges added to Global Consolidated Net Income pursuant to clause (a)(iv) above in respect of a previous Measurement Period. For the purposes of calculating Global Consolidated EBITDA for any Measurement Period, (i) the Global Consolidated EBITDA of any Person acquired by the Parent or its Subsidiaries during such Measurement Period shall be included on a pro forma basis for such period (assuming the consummation of such Acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred on the first day of such Measurement Period, but excluding any adjustments giving effect to expected costs savings or synergies), and (ii) the Global Consolidated EBITDA of any Person Disposed of by the Parent or its Subsidiaries during such Measurement Period shall be excluded for such Measurement Period (assuming the consummation of such Disposition and the repayment of any Indebtedness in connection therewith occurred on the first day of such period).

          “ Global Consolidated Interest Charges ” means, for any Measurement Period and without duplication, the sum of (a) all interest expense, premium payments amortization, debt discount amortization, fees amortization, charges and related expenses amortization, in each case to the extent treated as interest expense in accordance with GAAP, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs or net gains under Swap Contracts to the extent such net costs or net gains are allocable to such period, and (b) the portion of rent expense with respect to such period under Capital Lease Obligations that is treated as interest in accordance with GAAP, in each case of or by the Parent and its Subsidiaries for the most recently completed Measurement Period, all as determined on a Consolidated basis.

          “ Global Consolidated Net Income ” means, as of any date of determination, the net income of the Parent and its Subsidiaries for the most recently completed Measurement Period, all as determined on a Consolidated basis in accordance with GAAP; provided , however , that there shall be excluded (a) items classified as unusual, non-recurring or extraordinary gains or losses (and the tax effects of such items) for such Measurement Period, (b) gains and losses realized upon the sale or other disposition of any property that is not sold or otherwise disposed of in the ordinary course of business (and the tax effects of such sales), (c) the cumulative effect of a change in accounting principles, (d) the

income (or loss) of such Person which is not a Loan Party or a Subsidiary during such Measurement Period in which any other Person has a joint interest with a Loan Party or any of its Subsidiaries, except to the extent of the amount of cash dividends or other distributions actually paid in cash to such Person during such period, and (e) the income (or loss) of such Person during such Measurement Period and accrued prior to the date it becomes a Subsidiary of a Person or any of such Person’s Subsidiaries or is merged into or consolidated with a Person or any of its Subsidiaries or that Person’s assets are acquired by such Person or any of its Subsidiaries.

          “ Global Leverage Ratio ” means, as of any date of determination, the ratio of (a) without duplication, the aggregate outstanding principal amount of all Indebtedness of the Parent and its Subsidiaries described in clauses (a), (b), (d), (e), (f), (g) and (h) of the definition of “Indebtedness” on such date (including such items that are Permitted Specified Subsidiary Indebtedness), determined on a Consolidated basis, to (b) Global Consolidated EBITDA for the most recently ended Measurement Period.

          “ Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

          “ Gross-Up Payment ” has the meaning specified in Section 3.01(a) .

          “ Guarantee ” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

          “ Guarantor ” means the Parent, each Domestic Subsidiary listed on Schedule 1.01 annexed hereto and each other Domestic Subsidiary of any Loan Party that executes and delivers a Facility Guaranty or Facility Guaranty supplement pursuant to Section 6.12 .

          “ Hazardous Materials ” means all radioactive substances or wastes and all hazardous or toxic substances, wastes or pollutants, including petroleum or petroleum distillates, asbestos or asbestos-

containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and any other deleterious substance regulated under any Environmental Law.

          “ Immaterial Subsidiary ” means each Subsidiary of any Loan Party that is not a Material Subsidiary.

          “ Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

          (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

          (b) the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

          (c) net obligations of such Person under any Swap Contract;

          (d) all obligations of such Person to pay the deferred purchase price of property or services (other than (i) trade accounts payable in the ordinary course of business, (ii) deferred compensation and (iii) any purchase price adjustment or earn-out obligation);

          (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

          (f) all Attributable Indebtedness of such Person;

          (g) all obligations of such Person in respect of Disqualified Stock; and

          (h) all Guarantees of such Person in respect of any of the foregoing.

          For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person and except to the extent such Person’s liability for such Indebtedness is otherwise limited. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

          “ Indemnified Taxes ” means Taxes other than Excluded Taxes.

          “ Indemnitee ” has the meaning specified in Section 10.04(b) .

          “ Information ” has the meaning specified in Section 10.07 .

          “ Intellectual Property ” has the meaning set forth in the Intellectual Property Security Agreement.

          “ Intellectual Property Security Agreement ” means the Intellectual Property Security Agreement dated as of the Closing Date among the Loan Parties and the Collateral Agent, in substantially

the form attached hereto as Exhibit G or otherwise in a form reasonably satisfactory to the Administrative Agent.

          “ Intercreditor Agreements ” means, collectively, the ABL Intercreditor Agreement and the Term Loan Intercreditor Agreement.

          “ Interest Payment Date ” means the last Business Day of each calendar quarter and the Maturity Date.

          “ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity interest in, another Person, or (c) any Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

          “ Investment Unit ” has the meaning specified in Section 10.15 .

          “ IP Collateral ” has the meaning specified in the Intellectual Property Security Agreement.

          “ IRS ” means the United States Internal Revenue Service.

          “ Laws ” means each international, foreign, federal, state and local statute, treaty, rule, guideline, regulation, ordinance, code and administrative or judicial precedent or authority, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and each applicable administrative order, directed duty, license, authorization and permit of, and agreement with, any Governmental Authority, in each case whether or not having the force of law.

          “ Lender ” has the meaning specified in the introductory paragraph hereto.

          “ Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

          “ Lien ” means (a) any mortgage, deed of trust, pledge, hypothecation, assignment for security, encumbrance, lien (statutory or other) or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale, or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) and (b) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

          “ Loan ” has the meaning specified in Section 2.01 .

          “ Loan Notice ” means a notice substantially in the form of Exhibit A hereto.

          “ Loan Documents ” means this Agreement, each Note, the Security Documents, each Facility Guaranty, the Side Agreement, the Services Fee Agreements and any other instrument or agreement now or hereafter executed and delivered by any Loan Party in connection herewith.

          “ Loan Parties ” means, collectively, the Borrower and each Guarantor. “ Loan Party ” means any one of such Persons.

          “ Luxembourg Pledge Agreement ” means the Share Pledge Agreement dated as of the Closing Date among the Parent, the Administrative Agent and the European Borrower.

          “ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities, or condition (financial or otherwise) of the Loan Parties taken as a whole; (b) a material impairment of the ability of any Loan Party to perform its obligations under the Loan Documents; or (c) a material impairment of the rights and remedies of the Administrative Agent or the Lenders under the Loan Documents.

          “ Material Indebtedness ” means Indebtedness (other than the Obligations) of the Loan Parties in an aggregate principal amount exceeding $15,000,000. For purposes of determining the amount of Material Indebtedness at any time, (x) the amount of the obligations in respect of any Swap Contract at such time shall be calculated at the Swap Termination Value thereof and (y) Indebtedness shall include undrawn committed or available amount and amounts owing to all creditors under any combined or syndicated credit arrangement.

          “ Material Subsidiary ” means, as of any date, a Subsidiary that (a) has a net worth (excluding in the determination thereof any Indebtedness of such Subsidiary to the Parent or another Subsidiary) of at least 5% of the Parent’s consolidated net worth as of the last day of the most recently ended Fiscal Quarter of the Parent for which financial statements are available, (b) has annual revenue (or annualized revenue in the case of any Person that has not been a Subsidiary for a full year) of at least 5% of the Parent’s consolidated revenue for the 12-month period ended as of the most recently ended Fiscal Quarter of the Parent for which financial statements are available, or (c) has annual net income (or annualized net income in the case of any Person that has not been a Subsidiary for a full year) of at least 5% of the Parent’s consolidated net income for the 12-month period ended as of the most recently ended Fiscal Quarter of the Parent for which financial statements are available.

          “ Maturity Date ” means July 30, 2014.

          “ Maximum Rate ” has the meaning specified in Section 10.09 .

          “ Measurement Period ” means, at any date of determination, the most recently completed four Fiscal Quarters of the Parent for which financial statements are available.

          “ Mexico JV Agreement ” means the Joint Venture Agreement of QS Mexico Holdings dated September 26, 2006 by and between the Borrower and PBM International LLC, as amended.

          “ Money Laundering Laws ” has the meaning specified in Section 5.24 .

          “ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

          “ Multiemployer Plan ” means any employee benefit plan of the type described in Section 3(37) of ERISA, to which a Loan Party or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions.

          “ Net Proceeds ” means, with respect to any applicable Disposition by any Loan Party, the excess, if any, of (a) the sum of cash and cash equivalents received in connection with such Disposition

(including any cash or cash equivalents received by any Loan Party by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (b) the sum of (i) the amount of any Indebtedness that is secured by the applicable asset by a Lien permitted hereunder and that is repaid (or an escrow is established for the future repayment thereof) in connection with such Disposition (other than Indebtedness under the Loan Documents), (ii) the reasonable out-of-pocket fees and expenses incurred by such Loan Party in connection with such transaction (including, without limitation, appraisals, and brokerage, legal, title and recording or transfer tax expenses and commissions) paid by any Loan Party to third parties, (iii) taxes paid or reasonably estimated to be actually payable in connection therewith, (iv) amounts provided as a reserve against any liabilities under any indemnification obligations or purchase price adjustment associated with such Disposition (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Proceeds), and (v) any liabilities relating to the property subject to such Disposition that are retained by any Loan Party or any of its Subsidiaries.

          “ Non-Consenting Lender ” has the meaning specified in Section 10.01 .

          “ Note ” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit B .

          “ Obligations ” means all advances to, and debts (including principal, interest, fees, costs, and expenses), liabilities, obligations, covenants and indemnities of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest, fees, costs and expenses that accrue after the commencement by or against any Loan Party or any Subsidiary thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

          “ OFAC ” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.

          “ OFAC List ” means the list of Specially Designated Nationals and Blocked Persons List of OFAC and Annex I to the United States Executive Order 13224 – Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism.

          “ Organization Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

          “ Other Taxes ” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, excluding , however , such taxes imposed as a result of an

assignment (other than an assignment that occurs as a result of the Borrower’s request pursuant to Section 3.06(b) ).

          “ Parent ” has the meaning specified in the introductory paragraph hereto.

          “ Participant ” has the meaning specified in Section 10.06(d) .

          “ Participating Member States ” means the member states of the European Communities that adopt or have adopted the Euro as their lawful currency in accordance with the legislation of the European Union relating to European Monetary Union.

          “ Patriot Act ” means USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

          “ Patent ” has the meaning specified in the Intellectual Property Security Agreement.

          “ Patent Security Agreement ” means the Patent Security Agreement dated as of the Closing Date among certain Loan Parties and the Collateral Agent, in substantially the form attached hereto as Exhibit J or otherwise in a form reasonably satisfactory to the Administrative Agent.

          “ PBGC ” means the Pension Benefit Guaranty Corporation.

          “ PCAOB ” means the Public Company Accounting Oversight Board.

          “ Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by a Loan Party or any ERISA Affiliate or to which a Loan Party or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

          “ Permitted Acquisition ” means an Acquisition by any Loan Party or any Subsidiary thereof in which all of the following conditions are satisfied:

          (a) no Default then exists or would immediately arise from the consummation of such Acquisition;

          (b) such Acquisition shall have been approved by the Board of Directors of the Person (or similar governing body if such Person is not a corporation) which is the subject of such Acquisition and such Person shall not have announced that it will oppose such Acquisition or shall not have commenced any action which alleges that such Acquisition shall violate applicable Law;

          (c) the Borrower shall have furnished the Administrative Agent with at least ten (10) days’ prior written notice of such intended Acquisition;

          (d) any assets acquired shall be utilized in, and if such Acquisition involves a merger, consolidation or stock acquisition, the Person which is the subject of such Acquisition shall be engaged in, a business otherwise permitted to be engaged in by the Borrower under this Agreement;

          (e) the business and assets acquired in such Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances);

          (f) no Indebtedness shall be incurred or assumed by any Loan Party in connection with or as a result of such Acquisition (other than Permitted Indebtedness); and

          (g) at the time of determination with respect to the specified Acquisition, the Borrower shall have certified, and shall have delivered supporting documentation reasonably satisfactory to the Administrative Agent, that Domestic Availability (as defined in the ABL Credit Agreement as in effect on the date hereof) immediately preceding, and on a pro forma basis on the date thereof and a projected basis for the twelve (12) months immediately following, such Acquisition was, and is projected to be, equal to or greater than the greater of (i) thirty percent (30%) of the Total Loan Cap (provided that, in the event of a refinancing of the ABL Credit Agreement as in effect on the date hereof or following its maturity, the Borrower and the Administrative Agent shall agree in good faith on a successor availability test which preserves the economic effect of this clause (i)) and (ii) $45,000,000.

          “ Permitted Disposition ” means any of the following:

          (a) Dispositions of inventory in the ordinary course of business;

          (b) (i) outbound licenses and sublicenses of Intellectual Property entered into or existing as of the date hereof and (ii) outbound licenses and sublicenses of Intellectual Property entered into following the date hereof in the ordinary course of business and on arm’s length terms; provided that, in the case of outbound licenses and sublicenses pursuant to clause (ii), unless the Administrative Agent otherwise consents in writing (such consent not to be unreasonably withheld): (A) no such license or sublicense may be for an initial term of more than five (5) years (not counting renewal terms), (B) each such license or sublicense shall contain customary provisions for the termination of the license or sublicense upon a change of control of the licensee or sublicensee and customary prohibitions against assignment of such license or sublicense by the licensee or sublicensee, and (C) the Loan Parties shall not, during any Fiscal Year, enter into any license or sublicense granting use of trademarks and/or service marks and related logos and/or slogans (a “ Post-Closing Mark License ”) if such license or sublicense provides for payment of annual license fees with respect to such trademarks and service marks reasonably expected to be paid, in the judgment of the Loan Party party to such license or sublicense (excluding upfront fees), during its first Fiscal Year which, when aggregated with the annual license fees (excluding upfront fees) reasonably expected to be paid, in the judgment of the Loan Party party to such license or sublicense, during the first year of all other Post-Closing Mark Licenses entered into by the Loan Parties during that same Fiscal Year, exceed $3,500,000, after deducting such portion of any license fees (excluding upfront fees) that are payable by a Loan Party, directly or indirectly, to the owners of the licensed marks as relate to such license or sublicense, to the extent that such Post-Closing Mark License is, in whole or in part, a sublicense. Notwithstanding the foregoing:  (x) the license fees (including upfront fees) payable under any Post-Closing Mark License which has a non-renewable term of one (1) year or less shall not be included for purposes of the foregoing clause (C), and (y) if, in any Fiscal Year, the Administrative Agent gives its consent to exceed $3,500,000 in annual license fees pursuant to clause (ii), then the licensee fees are deemed to be reset at zero for that Fiscal Year, as of the date such consent was provided;

          (c) licenses for the conduct of licensed departments within Stores in the ordinary course of business;

          (d) Dispositions of equipment and other assets (including abandonment of Intellectual Property) in the ordinary course of business that is substantially worn, damaged, obsolete or, in the reasonable business judgment of a Loan Party, no longer used or necessary in its business;

          (e) Dispositions among the Loan Parties (other than transfer of ownership rights in Intellectual Property) (without regard to clause (b) above in this definition);

          (f) Dispositions of Real Estate (or of any Person or Persons created to hold such Real Estate or the equity interests in such Person or Persons), including sale-leaseback transactions involving any such Real Estate pursuant to leases on market terms, as long as (i) such sale is made for fair market value; (ii) at least 75% of the consideration from such Disposition is in the form of cash or cash equivalents; and (iii) an amount equal to the Net Proceeds of such Disposition are applied to the Loans to the extent required by Section 2.05(b) ;

          (g) Dispositions consisting of the compromise, settlement or collection of accounts receivable in the ordinary course of business, consistent with past practices;

          (h) leases, subleases or space leases (and terminations of any of the foregoing), in each case in the ordinary course of business and which do not materially interfere with the business of the Parent and its Subsidiaries, taken as a whole;

          (i) Dispositions of cash, cash equivalents and Permitted Investments described in clauses (a) through (i) of the definition of “Permitted Investments” contained in this Agreement, in each case on ordinary business terms and, to the extent constituting a Disposition, the making of Permitted Investments;

          (j) any Disposition of Real Estate to a Governmental Authority as a result of the condemnation of such Real Estate as long as an amount equal to the Net Proceeds of such Disposition are applied to the Loans to the extent required by Section 2.05(b) ;

          (k) [reserved]

          (l) to the extent constituting a Disposition, (i) transactions permitted by Section 7.04 , (ii) Restricted Payments permitted by Section 7.06 and (iii) Liens permitted by Section 7.01 ;

          (m) Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements as long as an amount equal to the Net Proceeds of such Disposition are applied to the Loans to the extent required by Section 2.05(b) ; and

          (n) other Dispositions, as long as (i) such Disposition is made for fair market value; (ii) at least 75% of the consideration from such Disposition is in the form of cash or cash equivalents; and (iii) an amount equal to the Net Proceeds of such Disposition are applied to the Loans to the extent required by Section 2.05(b) .

          “ Permitted Encumbrances ” means any of the following:

          (a) Liens imposed by law for Taxes that are not overdue for a period of more than thirty (30) days or are being contested in compliance with Section 6.04 ;

          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by applicable Law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 6.04 ;

          (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security or similar laws or regulations, other than any Lien imposed by ERISA;

          (d) deposits to secure or relating to the performance of bids, trade contracts, government contracts and leases (other than Indebtedness), statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

          (e) Liens in respect of judgments that do not constitute an Event of Default hereunder;

          (f) easements, covenants, conditions, restrictions, building code laws, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Parent and its Subsidiaries, taken as a whole, and such other minor title defects or survey matters that are disclosed by current surveys that, in each case, do not materially interfere with the ordinary conduct of business of the Parent and its Subsidiaries, taken as a whole;

          (g) Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed other than after-acquired property affixed or incorporated thereto and proceeds or products thereof, (ii) the amount secured or benefited thereby is not increased except to the extent permitted hereunder, and (iii) any renewal or extension of the obligations secured or benefited thereby is permitted hereunder;

          (h) Liens on fixed or capital assets acquired by any Loan Party securing purchase money Indebtedness permitted hereunder of any Loan Party to finance the acquisition of any fixed or capital assets, including Capital Lease Obligations and Synthetic Lease Obligations, and any Indebtedness permitted hereunder assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness permitted hereunder that do not increase the outstanding principal amount thereof so long as (i) such Liens and the Indebtedness secured thereby are incurred prior to or within one hundred and eighty (180) days after such acquisition (other than refinancing thereof permitted hereunder), (ii) the Indebtedness secured thereby does not exceed the cost of acquisition of such fixed or capital assets and (iii) such Liens shall not extend to any other property or assets of the Loan Parties, replacements thereof and additions and accessions to such property and the proceeds and the products thereof and customary security deposits;

          (i) Liens under the Security Documents for the benefit of the Credit Parties;

          (j) landlords’ and lessors’ Liens in respect of rent not in default for more than thirty (30) days;

          (k) possessory Liens in favor of brokers and dealers arising in connection with the acquisition or disposition of Investments owned as of the date hereof and other Permitted Investments, provided that such Liens (i) attach only to such Investments or other Investments held by such broker or dealer and (ii) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing;

          (l) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s liens, liens in favor of securities intermediaries, rights of setoff or similar rights and remedies as to deposit accounts or securities accounts or other funds maintained with depository institutions or securities intermediaries;

          (m) Liens (if any) arising from precautionary UCC filings regarding “true” operating leases or consignment of goods to a Loan Party;

          (n) voluntary Liens on property in existence at the time such property is acquired pursuant to a Permitted Investment or on such property of a Subsidiary of a Loan Party in existence at the time such Subsidiary is acquired pursuant to a Permitted Investment; provided that such Liens are not incurred in connection with, or in anticipation of, such Permitted Investment and do not attach to any other assets of any Loan Party or any Subsidiary;

          (o) Liens in favor of customs and revenues authorities imposed by applicable Law arising in the ordinary course of business in connection with the importation of goods;

          (p) Liens (i) on cash advances in favor of the seller of any property to be acquired in any Permitted Acquisition or other Permitted Investment to be applied against the purchase price for such Permitted Acquisition or other Permitted Investment, (ii) consisting of an agreement to transfer any property in a Permitted Disposition, in each case, solely to the extent such Acquisition or Disposition, as the case may be, would have been permitted on the date of the creation of such Lien, and (iii) on any cash earnest money deposits made by the Parent or any of its Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;

          (q) any interest or title of a lessor or sublessor under leases or subleases or secured by a lessor’s or sublessor’s interests under leases entered into by the Parent or any of its Subsidiaries in the ordinary course of business;

          (r) Liens in favor of the licensor or sublicensor in respect of inbound licensing of Intellectual Property in the ordinary course of business;

          (s) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods (including under Article 2 of the UCC) and Liens that are contractual rights of set-off relating to purchase orders and other similar agreements entered into by the Parent or any of its Subsidiaries;

          (t) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto incurred in the ordinary course of business;

          (u) Liens arising out of sale and leaseback transactions permitted hereunder and securing Permitted Indebtedness incurred for the construction or acquisition or improvement of, or to finance or to refinance, any Real Estate owned by any Loan Party (including therein any Permitted Indebtedness incurred in connection with sale-leaseback transactions permitted hereunder);

          (v) Liens securing Indebtedness in respect of (i) the ABL Credit Agreement; provided such Liens (to the extent such Liens encumber Collateral) are subject to the ABL Intercreditor Agreement (or, in the case of any refinancing thereof permitted hereunder, another intercreditor agreement containing terms that are at least as favorable to the Credit Parties as those contained in the ABL Intercreditor Agreement) and the Indebtedness secured by such Liens is permitted to be incurred pursuant to clause (a)(i) of the definition of “Permitted Indebtedness”, and (ii) the Euro Term Loan Credit Agreement; provided such Liens (to the extent such Liens encumber Collateral) are subject to the Term Loan Intercreditor Agreement (or, in the case of any refinancing thereof permitted hereunder, another intercreditor agreement containing terms that are at least as favorable to the Credit Parties as those contained in the Term Loan Intercreditor Agreement);

          (w) leases or subleases granted to others in the ordinary course of business which do not interfere in any material respect with the business of the Parent and its Subsidiaries, taken as a whole;

          (x) Liens on specific items of inventory or other goods and the proceeds thereof securing such Person’s obligations in respect of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods (in each case, to the extent such items constitute Permitted Indebtedness);

          (y) outbound licenses of Intellectual Property permitted under clause (b) or (e) of the definition of “Permitted Dispositions”; and

          (z) other Liens securing obligations outstanding in an aggregate principal amount not to exceed $10,000,000.

          “ Permitted Indebtedness ” means any of the following:

          (a) (i) Indebtedness in respect of the ABL Credit Agreement and any refinancings, refundings, renewals, extensions or replacements thereof; provided that (A) the aggregate principal amount of any Indebtedness in respect of the ABL Credit Agreement or any refinancing, refunding, renewal, extension or replacement thereof shall not exceed $250,000,000 at any time or (B) any Indebtedness in respect of the ABL Credit Agreement or any refinancing, refunding, renewal, extension or replacement thereof shall not have an earlier maturity date than the ABL Facility in effect on the date hereof or a decreased weighted average life than the ABL Facility in effect on the date hereof; (ii) Indebtedness in respect of the Euro Term Loan Credit Agreement; and (iii) any other Indebtedness listed on Schedule 7.03(a) and, in the case of the foregoing clauses (ii) and (iii), any refinancings, refundings, renewals, extensions or replacements of any such Indebtedness; provided that (x) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal, extension or replacement, and (y) the result of such refinancing, refunding, renewal, extension or replacement shall not be an earlier maturity date or decreased weighted average life of such Indebtedness;

          (b) the Obligations;

          (c) Indebtedness permitted to be incurred pursuant to the Senior Note Indenture (as in effect on the date hereof (and without regard to any waivers or consents that may be obtained thereunder after the date hereof) (for the avoidance of doubt, any Indebtedness, including any Specified Subsidiary Permitted Indebtedness, that reduces the availability of borrowing baskets under the terms of the Senior Note Indenture shall reduce the availability of such baskets for purposes of this clause (c) as well)); and

          (d) other Indebtedness; provided , that, at the time of incurrence of such Indebtedness (i) the Global Leverage Ratio shall not exceed 5.00 to 1.00 and (ii) the Americas Leverage Ratio shall not exceed 5.00 to 1.00, in each case after giving pro forma effect to such incurrence of Indebtedness (and application of proceeds therefrom) as if such Indebtedness had been incurred (and such proceeds were applied) on the first day of the relevant Measurement Period.

          “ Permitted Investments ” means any of the following:

          (a) readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereof;

          (b) commercial paper issued by any Person organized under the laws of any state of the United States of America and rated, at the time of acquisition thereof, at least “Prime-2” (or the then equivalent grade) by Moody’s or at least “A-2” (or the then equivalent grade) by S&P, in each case with maturities of not more than one year from the date of acquisition thereof;

          (c) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated, at the time of acquisition thereof, as described in clause (b) of this definition and (iii) has combined capital and surplus of at least $500,000,000, in each case with maturities of not more than one year from the date of acquisition thereof;

          (d) fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above (without regard to the limitation on maturity contained in such clause) and entered into with a financial institution satisfying the criteria described in clause (c) above at the time of acquisition thereof or with any primary dealer and having a market value at the time that such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such counterparty entity with whom such repurchase agreement has been entered into;

          (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States or province or territory of Canada, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state,

commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s;

          (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (c) of this definition;

          (g) marketable short-term money market and similar securities or funds having, at the time of acquisition thereof, a rating of at least A-2 from S&P (or, if at any time S&P shall not be rating such obligations, an equivalent rating from another nationally recognized rating service);

          (h) shares of investment companies that are registered under the Investment Company Act of 1940 and invest primarily in one or more of the types of securities described in clauses (a) through (g) above;

          (i) in the case of investments by any Foreign Subsidiary or investments made in a country outside the United States of America, other customarily utilized high-quality investments in the country where such Foreign Subsidiary is located or in which such investment is made;

          (j) Investments existing on the Closing Date and set forth on Schedule 7.02 , and any modification, renewal or extension thereof; provided that, the amount of any Investment permitted pursuant to this clause is not increased from the amount of such Investment on the Closing Date except pursuant to the terms of such Investment as of the Closing Date or as otherwise permitted by Section 7.02 ;

          (k) Investments by any Loan Party in any other Loan Party; provided that, for purposes of this clause (k), with respect to the Parent, the definition of “Acquisition” shall exclude clause (c) thereof;

          (l) so long as at the time of determination with respect to an Investment to be made pursuant to this clause (l) the Borrower shall have certified, and shall have delivered supporting documentation reasonably satisfactory to the Administrative Agent, that Domestic Availability (as defined in the ABL Credit Agreement as in effect on the date hereof) immediately preceding, and on a pro forma basis on the date thereof and a projected basis for the twelve (12) months immediately following, such Investment was, and is projected to be, equal to or greater than the greater of (a) thirty percent (30%) of the Total Loan Cap (provided that, in the event of any refinancing of the ABL Credit Agreement as in effect on the date hereof or following its maturity, the Borrower and the Administrative Agent shall agree in good faith on a successor availability test which preserves the economic effect of this clause (a)) and (b) $45,000,000, Investments (i) to refinance Indebtedness of Quiksilver Japan K.K. outstanding on the date hereof and listed on Schedule 7.03(l) , provided that (A) the aggregate amount of such refinancing shall not exceed $20,000,000 and (B) if the aggregate amount of such Investment pursuant to this clause (i) exceeds $5,000,000, substantially simultaneously with and as a condition to the extension of such funds, the shares of Quiksilver Japan K.K. shall be transferred to the European Borrower, 54th Street or a Wholly-Owned Subsidiary of 54th Street and Quiksilver Japan K.K. shall enter into a guarantee and pledge over all its assets (subject to customary exceptions) in favor of the Euro Term Loan Agent for the benefit of the lenders under the Euro Term Loan unless the Euro Term Loan Agent or requisite lenders under the Euro Term Loan Credit Agreement shall otherwise agree; (ii) to provide for the payment of the cash portion

of the exercise price payable by QS Holdings (or its successor) upon exercise of its buyout rights pursuant to the Brazil JV Agreement, provided that the aggregate amount of such buyout shall not exceed the cash portion of the Agreed Value for the relevant Tranche (as defined in the Brazil JV Agreement) on the terms in effect as of the date hereof and, substantially simultaneously with and as a condition to the extension of such funds, the shares of Quiksilver Brazil shall, to the extent not already held by the European Borrower, 54th Street or a Wholly-Owned Subsidiary of 54th Street, be transferred to the European Borrower, 54th Street or a Wholly-Owned Subsidiary of 54th Street and Quiksilver Brazil shall enter into a guarantee and pledge over all its assets (subject to customary exceptions) in favor of the Euro Term Loan Agent for the benefit of the lenders under the Euro Term Loan unless the Euro Term Loan Agent or requisite lenders under the Euro Term Loan Credit Agreement shall otherwise agree; (iii) to provide for the payment of the cash portion of the exercise price payable by the Borrower upon exercise of its buyout rights or its put obligations pursuant to the Mexico JV Agreement on the terms in effect as of the date hereof and, substantially simultaneously with and as a condition to the extension of such funds, QS Mexico Holdings shall enter into a guarantee and pledge over all its assets (subject to customary exceptions) in favor of the Euro Term Loan Agent for the benefit of the lenders under the Euro Term Loan unless the Euro Term Loan Agent or requisite lenders under the Euro Term Loan Credit Agreement shall otherwise agree; (iv) by any Loan Party in any Wholly-Owned Subsidiary that is not a Loan Party, excluding Investments made pursuant to clauses (i), (ii), (iii) and (v), provided that all such Investments pursuant to this clause (iv) shall not exceed $10,000,000 in the aggregate at any one time outstanding; and (v) by any Loan Party in any Person, excluding Investments made pursuant to clauses (i), (ii), (iii) and (iv), provided that all such Investments pursuant to this clause (v) shall not exceed $10,000,000 in the aggregate at any one time outstanding;

          (m) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business;

          (n) Guarantees constituting Permitted Indebtedness;

          (o) Investments in Swap Contracts not prohibited hereunder; provided that such obligations are (or were) entered into in the ordinary course of business for the purposes of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates, and not for purposes of speculation or taking a “market view”;

          (p) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

          (q) (i) advances of payroll payments to employees in the ordinary course of business and (ii) other loans and advances to officers, directors and employees of the Loan Parties and Subsidiaries in the ordinary course of business in an aggregate amount not to exceed $5,000,000 at any time outstanding; provided , however , that an individual’s use of a cashless exercise procedure to pay the exercise price and required tax withholding (or either of them) in connection with his exercise of a compensatory option to purchase Equity Interests issued by the Parent shall not give rise to a loan or advance for the purposes of this clause (q) to the extent that all funds representing full payment of such option exercise price and required tax withholding are actually remitted to the Parent before the close of business on either (x) the date of exercise of the stock option or (y) the date of issuance of the Equity Interests pursuant to the option exercise;

          (r) Investments constituting Permitted Acquisitions and earnest money deposits made in connection with any letter of intent or purchase agreement permitted hereunder;

          (s) capital contributions made by any Loan Party to another Loan Party;

          (t) Investments received by any Loan Party from purchasers of any assets pursuant to Permitted Dispositions;

          (u) Investments of any Person existing at the time such Person becomes a Subsidiary of any Loan Party pursuant to a Permitted Acquisition or other Permitted Investment or as a result of a fundamental change transaction in accordance with Section 7.04 so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such fundamental change transaction;

          (v) Guarantees of leases (other than Capital Lease Obligations or Synthetic Lease Obligations) or other obligations that do not constitute Indebtedness, in each case entered into in the ordinary course of business;

          (w) Investments consisting of Dispositions permitted under Section 7.05 ; and

          (x) purchases of inventory, supplies and materials and, to the extent a Permitted Disposition under clause (b) or (e) of the definition of “Permitted Disposition”, the licensing or contribution of Intellectual Property pursuant to joint marketing arrangements with other Persons, in each case in the ordinary course of business.

          “ Permitted Specified Subsidiary Encumbrances ” means any of the following:

          (a) Liens imposed by law for Taxes that are not overdue for a period of more than thirty (30) days or are being contested in compliance with Section 6.04 ;

          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by applicable Law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 6.04 ;

          (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security or similar laws or regulations, other than any Lien imposed by ERISA;

          (d) deposits to secure or relating to the performance of bids, trade contracts, government contracts and leases (other than Indebtedness), statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

          (e) Liens in respect of judgments that do not constitute an Event of Default hereunder;

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

conduct of business of the Specified Subsidiary and its Subsidiaries, taken as a whole, and such other minor title defects or survey matters that are disclosed by current surveys that, in each case, do not materially interfere with the ordinary conduct of business of the Specified Subsidiary and its Subsidiaries, taken as a whole;

          (g) Liens on fixed or capital assets acquired by any Specified Subsidiary securing purchase money Indebtedness permitted hereunder of any Specified Subsidiary to finance the acquisition of any fixed or capital assets, including Capital Lease Obligations and Synthetic Lease Obligations, so long as (i) such Liens and the Indebtedness secured thereby are incurred prior to or within one hundred and eighty (180) days after such acquisition (other than refinancing thereof permitted hereunder), (ii) the Indebtedness secured thereby does not exceed the cost of acquisition of such fixed or capital assets and (iii) such Liens shall not extend to any other property or assets of the Specified Subsidiary, replacements thereof and additions and accessions to such property and the proceeds and the products thereof and customary security deposits;

          (h) landlords’ and lessors’ Liens in respect of rent not in default for more than thirty (30) days;

          (i) possessory Liens in favor of brokers and dealers arising in connection with the acquisition or disposition of Investments owned as of the date hereof and other Permitted Investments by a Specified Subsidiary, provided that such Liens (a) attach only to such Investments or other Investments held by such broker or dealer and (b) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing;

          (j) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s liens, liens in favor of securities intermediaries, rights of setoff or similar rights and remedies as to deposit accounts or securities accounts or other funds maintained with depository institutions or securities intermediaries;

          (k) Liens (if any) arising from precautionary UCC filings regarding “true” operating leases or consignment of goods to a Specified Subsidiary;

          (l) Liens in favor of customs and revenues authorities imposed by applicable Law arising in the ordinary course of business in connection with the importation of goods;

          (m) any interest or title of a lessor or sublessor under leases or subleases or secured by a lessor’s or sublessor’s interests under leases entered into in the ordinary course of business;

          (n) Liens in favor of the licensor or sublicensor in respect of inbound licensing of Intellectual Property in the ordinary course of business granted by a Specified Subsidiary;

          (o) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods (including under Article 2 of the UCC) and Liens that are contractual rights of set-off relating to purchase orders and other similar agreements entered into by any Specified Subsidiary;

          (p) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto incurred in the ordinary course of business;

          (q) leases or subleases granted to others in the ordinary course of business which do not interfere in any material respect with the business of the Specified Subsidiary and its Subsidiaries, taken as a whole;

          (r) Liens on specific items of inventory or other goods and the proceeds thereof securing such Person’s obligations in respect of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods (in each case, to the extent such items constitute Permitted Indebtedness); and

          (s) outbound licenses of Intellectual Property permitted under clause (b) or (e) of the definition of “Permitted Dispositions”.

          “ Permitted Specified Subsidiary Indebtedness ” means any of the following:

          (a) Indebtedness in respect of the ABL Credit Agreement and the Euro Term Loan Credit Agreement and any other Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and, in each case, any refinancings, refundings, renewals or extensions of any of the foregoing Indebtedness; provided that (i) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a premium or interest paid, and (ii) the result of such extension, renewal or replacement shall not be an earlier maturity date or decreased weighted average life of such Indebtedness;

          (b) Indebtedness of any Specified Subsidiary to any other Specified Subsidiary, other than Indebtedness of Quiksilver Brazil or Quiksilver Industria e Comercio de Artigos Esportivos Ltda. to any other Specified Subsidiary;

          (c) Indebtedness in respect of performance bonds, bid bonds, customs and appeal bonds, surety bonds, performance and completion guarantees and similar obligations, or, to the extent in connection with purchases from suppliers, obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case provided in the ordinary course of business;

          (d) Indebtedness constituting indemnification obligations or obligations in respect of purchase price or other similar adjustments in connection with Permitted Dispositions;

          (e) Guarantees of any Indebtedness described in clause (a) hereof;

          (f) obligations in respect of cash management services, netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements;

          (g) Indebtedness in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within thirty (30) days following the incurrence thereof;

          (h) (i) purchase money Indebtedness of any Specified Subsidiary organized in Canada or any province thereof to finance the acquisition of any fixed or capital assets, including Capital Lease Obligations and Synthetic Lease Obligations, in an aggregate principal amount for all such Specified Subsidiaries not to exceed $10,000,000 at any time outstanding; and (ii) purchase money Indebtedness of any Specified Subsidiary (other than any Specified Subsidiary organized in Canada or any province thereof) to finance the acquisition of any fixed or capital assets, including Capital Lease Obligations and Synthetic Lease Obligations, in an aggregate principal amount for all such Specified Subsidiaries not to exceed $10,000,000 at any time outstanding;

          (i) obligations (contingent or otherwise) of any Specified Subsidiary existing or arising under any Swap Contract, provided that such obligations are (or were) entered into by such Specified Subsidiary in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates, and not for purposes of speculation or taking a “market view”; and

          (j) without duplication of any Indebtedness described in clause (a) through (i) above, other Indebtedness in an aggregate principal amount not to exceed $10,000,000 at any time outstanding.

          “ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, limited partnership, Governmental Authority or other entity.

          “ PIK Amounts ” has the meaning specified in Section 2.08(d) .

          “ PIK Election ” has the meaning specified in Section 2.08(d) .

          “ Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA including, for purposes of clarity, a Pension Plan and a Multiemployer Plan) established, maintained or contributed to by a Loan Party or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

          “ Pledge Agreements ” means, collectively, (a) the Pledge Agreement dated as of the Closing Date among the Loan Parties party thereto and the Collateral Agent, in substantially the form attached hereto as Exhibit H or otherwise in a form reasonably satisfactory to the Administrative Agent, and (b) the Luxembourg Pledge Agreement.

          “ Post-Closing Mark License ” has the meaning set forth in clause (b) of the definition of “Permitted Disposition”.

          “ QS Holdings ” means QS Holdings S.à r.l., a Luxembourg private limited liability company.

          “ Real Estate ” means all land, together with the buildings, structures, parking areas, and other improvements thereon, now or hereafter owned or leased by any Loan Party or any Subsidiary, including all easements, rights-of-way, and similar rights relating thereto.

          “ Register ” has the meaning specified in Section 10.06(c) .

          “ Registered Public Accounting Firm ” has the meaning specified by the Securities Laws and shall be independent of the Parent and its Subsidiaries as prescribed by the Securities Laws.

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

          “ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.

          “ Required Lenders ” means, as of any date of determination, Lenders holding in the aggregate more than 50% of the aggregate outstanding principal amount of all Loans; provided that the portion of the aggregate outstanding principal amount of all Loans held or deemed held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

          “ Responsible Officer ” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of a Loan Party or any of the other individuals designated in writing to the Administrative Agent by an existing Responsible Officer of a Loan Party as an authorized signatory of any certificate or other document to be delivered hereunder. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

          “ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of any Loan Party, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to such Loan Party’s stockholders, partners or members (or the equivalent of any thereof).

          “ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

          “ Sarbanes-Oxley ” means the Sarbanes-Oxley Act of 2002, as amended and in effect from time to time.

          “ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

          “ Securities Laws ” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB.

          “ Security Agreement ” means the Security Agreement dated as of the Closing Date among the Loan Parties and the Collateral Agent, in substantially the form attached hereto as Exhibit F or otherwise in a form reasonably satisfactory to the Administrative Agent.

          “ Security Documents ” means the Security Agreement, the Pledge Agreements, the Intellectual Property Security Agreement, the Copyright Security Agreement, the Patent Security Agreement, the Trademark Security Agreement and each other security agreement or other instrument or document executed and delivered by any Loan Party to the Administrative Agent pursuant to this Agreement or any other Loan Document granting a Lien on any asset of any Loan Party to secure any of the Obligations.

          “ Senior Note Indenture ” means the Indenture, dated as of July 22, 2005, between the Parent, as issuer, and Wilmington Trust Company, as trustee, in connection with the issuance of the Senior Notes, together with all instruments and other agreements entered into by the Parent or any Subsidiary in connection therewith, and any refinancings, refundings, renewals, extensions or replacements of any of the foregoing; provided that (i) the amount of Indebtedness thereunder is not increased at the time of such refinancing, refunding, renewal, extension or replacement except by an amount equal to a premium or other amount paid, and fees and expenses incurred, in connection with such refinancing, refunding, renewal, extension or replacement, and (ii) the result of such refinancing, refunding, extension, renewal or replacement shall not be an earlier maturity date or decreased weighted average life of such Indebtedness.

          “ Senior Notes ” means the senior unsecured notes issued by the Parent pursuant to the Senior Note Indenture.

          “ Services Fee Agreements ” means (a) the DC Shoes, Inc. License and Services Agreement dated as of July 30, 2009 by and between DC Shoes and Emerald Coast, and (b) the DC Shoes, Inc. License and Services Fee Agreement dated as of July 31, 2009, by and between DC Shoes, Inc. and DC Shoes Australia Pty. Ltd.

          “ Side Agreement ” means the agreement dated as of July 30, 2009 by and among 54th Street, the Administrative Agent, the Euro Term Loan Agent, Quiksilver Canada Corp. and Quiksilver Indústria e Comércio de Artigos Esportivos Ltda.

          “ Solvent ” and “ Solvency ” means, with respect to any Person on a particular date, that on such date (a) at fair valuation, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person, (b) the present fair saleable value of the properties and assets of such Person is not less than the amount that would be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts beyond such Person’s ability to pay as such debts mature, and (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or transaction, for which such Person’s properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged. The amount of all guarantees or other contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, can reasonably be expected to become an actual or matured liability.

          “ Specified Subsidiary ” means each of Quiksilver Canada Corp., QS Retail Canada Corp., Quiksilver Brazil and Quiksilver Industria e Comercio de Artigos Esportivos Ltda.

          “ Store ” means any retail store (which may include any real property, fixtures, equipment, inventory and other property related thereto) operated, or to be operated, by any Loan Party.

          “ Subordinated Indebtedness ” means Indebtedness which is expressly subordinated in right of payment to the prior payment in full of the Obligations.

          “ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the Equity Interests having ordinary voting power for the election of directors or other governing body are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of a Loan Party.

          “ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

          “ Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

          “ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

          “ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

          “ Term Loan Intercreditor Agreement ” means that certain Collateral Agency Agreement, dated as of the Closing Date, among the Administrative Agent, the Euro Term Loan Agent and the Collateral Agent.

          “ Termination Date ” means the earlier to occur of (i) the Maturity Date and (ii) the date on which the maturity of the Obligations is accelerated (or deemed accelerated) in accordance with Article VIII .

          “ Total Loan Cap ” has the meaning specified in the ABL Credit Agreement as in effect on the date hereof.

          “ Trademark ” has the meaning specified in the Intellectual Property Security Agreement.

          “ Trademark Security Agreement ” means the Trademark Security Agreement dated as of the Closing Date among certain Loan Parties and the Collateral Agent, in substantially the form attached hereto as Exhibit K or otherwise in a form reasonably satisfactory to the Administrative Agent.

          “ Trading with the Enemy Act ” has the meaning specified in Section 10.20 .

          “ UCC ” or “ Uniform Commercial Code ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if a term is defined in Article 9 of the Uniform Commercial Code differently than in another Article thereof, the term shall have the meaning set forth in Article 9; provided , further , that, if by reason of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, of a security interest in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Uniform Commercial Code” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be.

          “ Unfunded Pension Liability ” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

          “ United States ” and “ U.S. ” mean the United States of America.

          “ Warrant Agreement ” means the Warrant and Registration Rights Agreement, dated as of the Closing Date by and among the Parent, Rhône Capital III L.P. and the initial Warrant holders party thereto.

          “ Warrants ” means those certain Warrants to purchase shares of common stock or Series A convertible preferred stock of the Parent issued to Romolo Holdings C.V., Triton SPV L.P., Triton Onshore SPV L.P., Triton Offshore SPV L.P. and Triton Coinvestment SPV L.P. on the Closing Date.

          “ Wholly Owned Subsidiary ” means, with respect to any Person, any corporation, partnership or other entity of which all of the Equity Interests (other than, in the case of a corporation, directors’ qualifying shares) are directly or indirectly owned or controlled by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.

          1.02 Other Interpretive Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

               (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “ include ,” “ includes ” and “ including ” shall be deemed to be followed by the phrase “without limitation.” The word “ will ” shall be construed to have the same meaning and effect as the word “ shall .” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, amendment and restatements, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “ herein ,” “ hereof ” and “ hereunder ,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any

reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “ asset ” and “ property ” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

               (b) In the computation of periods of time from a specified date to a later specified date, unless otherwise expressly provided, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”

               (c) Article and Section headings used herein and in the other Loan Documents are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement or any other Loan Document.

               (d) Any other undefined term contained in any of the Loan Documents shall, unless the context indicates otherwise, have the meaning provided for such term in the Uniform Commercial Code as in effect in the State of New York to the extent the same are used or defined therein.

          1.03 Accounting Terms .

               (a)  Generally . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

               (b)  Changes in GAAP . If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

          1.04 Rounding . Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

          1.05 Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

          1.06 Currency Equivalents Generally . Any amount specified in this Agreement (other than in Articles II , IX and X ) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the

applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 1.06 , the “ Spot Rate ” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency. Notwithstanding the foregoing, for purposes of determining compliance with Sections 7.01 , 7.02 and 7.03 with respect to any amount of Indebtedness or Investment in a currency other than Dollars, no Default or Event of Default shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness or Investment is incurred; provided that, for the avoidance of doubt, the foregoing provisions of this Section 1.06 shall otherwise apply to such Sections, including with respect to determining whether any Indebtedness or Investment may be incurred at any time under such Sections.

          1.07 Certifications . All certifications to be made hereunder by an officer or representative of a Loan Party shall be made by such Person in his or her capacity solely as an officer or a representative of such Loan Party, on such Loan Party’s behalf and not in such Person’s individual capacity.

ARTICLE II

THE COMMITMENTS AND LOANS

          2.01 Loans . Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “ Loan ”) to the Borrower on the Closing Date in an aggregate principal amount equal to such Lender’s Commitment. The aggregate amount of the Loans shall not exceed the Aggregate Commitments.

          2.02 Borrowing of Loans .

               (a) The Borrowing of Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent. Such notice must be received by the Administrative Agent not later than 11:00 a.m. one Business Day prior to the requested date of such Borrowing of Loans. The Loan Notice (whether telephonic or written) shall specify (i) the requested date of the Borrowing (which shall be the Closing Date), and (ii) the principal amount of Loans to be borrowed.

               (b) Following receipt of the Loan Notice, the Administrative Agent shall promptly notify each Lender of the contents of such Loan Notice. Each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 9:00 a.m. on the Closing Date. Upon satisfaction of the conditions set forth in Section 4.01 , the Administrative Agent shall use reasonable efforts to make all funds so received available to the Borrower in like funds by no later than 9:00 a.m. on the Closing Date in accordance with instructions provided to the Administrative Agent by the Borrower.

          2.03 [Reserved] .

          2.04 [Reserved] .

          2.05 Prepayments .

               (a) The Borrower may, upon notice to the Administrative Agent, at any time and from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. on the date of prepayment; (ii) any prepayment of Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof or, if less, the entire principal amount thereof then outstanding; and (iii) any voluntary prepayment of Loans made on or prior to the third anniversary of the Closing Date shall be accompanied by any applicable Exchange Rate Make-Whole Payment. Each such notice shall specify the date and amount of such prepayment. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. The Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided , that a notice of prepayment delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any prepayment of a Loan shall be accompanied by all accrued interest on the amount prepaid. Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.

               (b) If the aggregate Net Proceeds received by the Loan Parties on account of Dispositions of any property or assets of a Loan Party described in clauses (f), (j), (m) and (n) of the definition of Permitted Disposition exceeds $15,000,000 in any Fiscal Year, then the Borrower shall prepay the Loans in an amount equal to such excess, no later than three (3) Business Days after receipt by any Loan Party of such Net Proceeds, in each case without premium or penalty except to the extent required by Section 2.09(b) ; provided , however , that such prepayment shall not be required to the extent that such Net Proceeds have been utilized to prepay the loans or cash collateralize other obligations under the ABL Credit Agreement. Notwithstanding the foregoing, in the case of a Disposition of the DC Shoes Business, an amount equal to the Net Proceeds may be utilized first , to prepay loans and/or cash collateralize other obligations under the ABL Credit Agreement; second , in the event such Disposition of the DC Shoes Busine