Crocs (CROX)

Item 1.01 Entry into a Material Definitive Agreement.

On October 14, 2009, Crocs, Inc. (the “Company”) its subsidiaries, Crocs Retail, Inc., Crocs Online, Inc., Ocean Minded, Inc., Jibbitz, LLC and Bite, Inc. (collectively with the Company, the “Borrowers”), and PNC Bank, National Association (“Bank”), entered into First Amendment to Revolving Credit and Security Agreement (the “Amendment”) to clarify the intentions and understandings of the parties with respect to the tangible net worth financial covenant contained in the Revolving Credit and Security Agreement dated September 25, 2009 (the “Credit Agreement”).  The Amendment decreases the Borrowers’ minimum tangible net worth requirement from $266 million to $205 million, measured at the end of each fiscal quarter, commencing with the fiscal quarter ending December 31, 2009.

Item 1.01 Entry into a Material Definitive Agreement.

On September 25, 2009, Crocs, Inc. (the “Company”) and its subsidiaries, Crocs Retail, Inc., Crocs Online, Inc., Ocean Minded, Inc., Jibbitz, LLC and Bite, Inc. (collectively with the Company, the “Borrowers”) entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association (“Bank”), as lender and agent for the lenders under in the Credit Agreement from time to time.

The following summary does not purport to be a complete summary of the Credit Agreement and is qualified in its entirety by reference to the Credit Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.

The Credit Agreement provides for an asset-backed revolving credit facility of up to $30 million in total to the Borrowers, which includes a $17.5 million sublimit for borrowings against Borrowers’ eligible inventory, a $2 million sublimit for borrowings against Borrowers’ eligible inventory in-transit, and a $4 million sublimit for letters of credit, subject to customary reserves and reductions to the extent of changes in the Company’s asset borrowing base.  Borrowings under the Credit Agreement may be used for fees and expenses related to the loan transaction itself, working capital needs and to reimburse drawings under the letters of credit.

Borrowings under the Credit Agreement bear interest at the Revolving Interest Rate. The Revolving Interest Rate is defined in the Credit Agreement as an interest rate per annum equal to (i) the sum of the Alternate Base Rate plus two percent (2%) with respect to domestic rate loans and (ii) the sum of three and one-half percent (3.50%) plus the greater of (a) the Eurodollar rate, and (b) one and one half percent (1.50%) with respect to Eurodollar rate loans, as applicable.  The Alternate Base Rate is defined as a rate per annum, for any day, equal to the higher of (i) the Bank’s published reference rate or, (ii) the Federal Funds Open rate in effect on such day plus one half of one percent (0.50%) and (iii) the sum of the Daily LIBOR Rate in effect on such day plus one percent (1.0%).  The Credit Agreement requires monthly interest payments with respect to domestic rate loans and at the end of each interest period with respect to Eurodollar rate loans.

The Credit Agreement will mature on September 25, 2012.  The Borrowers may terminate the Credit Agreement at any time prior to the maturity date upon ninety (90) days’ prior written notice and upon payment in full of all outstanding obligations under the Credit Agreement.  If the Borrowers terminate the Credit Agreement within the first three years after the date on which the Credit Agreement is entered into, the Borrowers must pay a specified early termination fee.  The Credit Agreement requires the Borrowers to prepay borrowings under the Credit Agreement in the event of certain dispositions of property.

Borrowings under the Credit Agreement are secured by all of the assets of the Borrowers, including all receivables, equipment, general intangibles, inventory, investment property, subsidiary stock, and leasehold interests of the Borrowers.  In addition, certain subsidiaries of the Company guaranty the obligations of the Borrowers and grant security interests to Bank in certain subsidiary stock and intellectual property owned by such subsidiary guarantors.

The Credit Agreement contains certain customary restrictive and financial covenants, including without limitation, (a) covenants requiring the Borrowers to (i) pay certain fees; (ii) maintain a tangible net worth in the amount not less than $266 million, measured at the end of each fiscal quarter; and (iii) maintain, at the end of each fiscal quarter, a fixed charge coverage ratio of not less than 1.1 to 1.0; and (b) covenants prohibiting the Borrowers from (i) entering into certain merger, consolidation or other reorganization transactions with, or acquiring all or a substantial portion of the assets or equity interests of, any person or entity; (ii) selling, leasing or transferring any of its properties or assets, with certain exceptions, including sales of inventory in the ordinary course of business; (iii) creating certain liens on any of its properties or assets; (iv) making any capital expenditure in excess of $35 million during the year ending December 31, 2009 and $50 million during each of the years ending December 31, 2010 and December 31, 2011; (v) declaring, paying or making any dividend or distribution; or (vi) creating, incurring or assuming additional indebtedness, in each case subject to certain exceptions.

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Item 1.01.        Entry into a Material Definitive Agreement

On May 8, 2007, Crocs, Inc. (“the Company”) entered into a credit agreement (“Revolving Credit Facility”) with Union Bank of California, N.A. (‘the Bank”).  On March 31, 2009, the Company entered into a tenth amendment (the “Amendment”) of the Revolving Credit Facility. Upon execution of the Amendment, the Company paid approximately $1.6 million, to be applied against the principal balance of the Revolving Credit Facility. The Amendment extends the maturity date of the Revolving Credit Facility from April 2, 2009 to September 30, 2009.  Additionally, the Amendment provides that the Company will pay accrued and unpaid interest on the first day of each month and make monthly principal payments through August 31, 2009 ranging from $1 million to $4 million.  All principal amounts outstanding under the Revolving Credit Facility will bear interest at rates based on a premium over the Bank’s reference rate tied to the then-outstanding principal balance. At the inception of the Amendment, this constitutes a decrease in interest rates from the previous agreement between the parties.  At maturity, all remaining principal and interest is due and payable to the Bank. The Amendment continues to require the Company to periodically provide certain financial information to the Bank. The current outstanding balance of the Revolving Credit Facility, after the effect of the Amendment, is $19.8 million. The Company has no additional borrowings available under the Revolving Credit Facility.

On May 8, 2007, Crocs, Inc. (“the Company”) entered into a credit agreement (“Revolving Credit Facility”) with Union Bank of California, N.A. (‘the bank”).  On February 13, 2009, the Company entered into a ninth amendment of the Revolving Credit Facility. The ninth amendment modifies the Revolving Credit Facility by extending the maturity date to April 2, 2009.  As part of the ninth amendment, the Company has also agreed to make $1 million in payments on agreed-upon dates prior to March 27, 2009.

Item 1.01.              Entry into a Material Definitive Agreement

On May 8, 2007, Crocs, Inc. (“the Company”) entered into a credit agreement (“Revolving Credit Facility”) with Union Bank of California, N.A. (‘the bank”).  On December 19, 2008, the Company entered into a seventh amendment of the Revolving Credit Facility. The seventh amendment modifies the Revolving Credit Facility by extending the maturity date to February 16, 2009.  The seventh amendment, among other things, limits borrowings to $22.4 million, modifies the interest rate on the loan to 9% above the bank’s reference rate and requires the Company to perform certain covenants and pay certain fees.

In connection with the seventh amendment, the Company entered into an Intellectual Property Security Agreement (‘the IP Security Agreement”) in favor of the bank.  Pursuant to the IP Security Agreement, the Company pledged to the bank substantially all of the Company’s intellectual property.  The IP Security Agreement specifies that the collateral includes all after-acquired assets, damage claims, license fees, royalties and all proceeds and products generated from these assets.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Item 1.01.         Entry into a Material Definitive Agreement

On September 29, 2006, Crocs, Inc. (the “Company”) entered into a membership interest purchase agreement (the “Membership Interest Purchase Agreement”) with the members of Jibbitz, LLC, a Colorado limited liability company (“Jibbitz”), to acquire 100% of the membership interests of Jibbitz for $10 million in cash, plus potential earn-out consideration of up to $10 million based on Jibbitz’s earnings before interest and taxes (“EBIT”) over the 3 years following the closing of the acquisition. The minimum EBIT targets that must be achieved in order for the members of Jibbitz to earn additional consideration are $10 million in the first year following the closing, $12.5 million in the second year, and $15.625 million in the third year. The cash consideration is also subject to adjustment based on the closing date balance sheet of Jibbitz. Subject to the satisfaction of customary closing conditions, the Company expects the acquisition to close in December.

On September 29, 2006, the Company and Jibbitz entered into an endorsement agreement (the “Endorsement Agreement”) providing that the Company will publicly endorse the products of Jibbitz and license to Jibbitz certain Company trademarks. The Company will also allow Jibbitz to access the Company’s network of distribution and retailers as well as utilize the Company’s warehousing and logistics infrastructure. As consideration,  Jibbitz will pay the Company a 15% royalty on gross sales during the term of the Endorsement Agreement and $1.5 million on December 15, 2006, subject to proration in the event the Endorsement Agreement is terminated prior to December 1, 2006. The Endorsement Agreement will terminate upon the closing of the Company’s acquisition of Jibbitz or the termination of the Membership Interest Purchase Agreement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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                On April 12, 2006, Crocs, Inc. entered into a sponsorship agreement with AVP Pro Beach Volleyball Tour, Inc. (“AVP”) pursuant to which Crocs becomes the exclusive footwear sponsor of the AVP Pro Beach Volleyball Tour and the tour will be renamed the, “AVP Crocs Tour.”

                In connection with this agreement, AVP will issue to Crocs a six year warrant to purchase up to 1,000,000 shares of AVP common stock at an exercise price equal to the closing price of AVP common stock on April 12, 2006, 20% of which are exercisable immediately and an additional 20% will become exercisable each year thereafter.  If the sponsorship agreement is not renewed after the third year, the remaining warrants will not become exercisable.  In addition to a cash sponsorship fee, Crocs will either, at its option, (1) pay $150,000 cash to AVP each year that the agreement is in effect or (2) issue to AVP a six year warrant with a value of $750,000 to purchase shares of Crocs common stock at an exercise price equal to the closing price of Crocs common stock on April 12, 2006, 20% of which are exercisable immediately and an additional 20% will become exercisable each year thereafter.  If the sponsorship agreement is not renewed after the third year, the remaining warrants will not become exercisable.

                The press release relating to the sponsorship agreement is attached hereto as Exhibit 99.1.