SECURITY AGREEMENT
Exhibit
99.2
THIS
SECURITY AGREEMENT (as the same may be amended, restated, supplemented or
otherwise modified from time to time, this “Security Agreement”)
is entered into as of October 3, 2008 by and between XXXXXXX OUTDOORS INC.,
a
Wisconsin corporation (the “Borrower”), each of
the Subsidiary Guarantors (as defined in the Credit Agreements referred to
below) (the Borrower and the Subsidiary Guarantors being referred to herein
collectively as the “Grantors” and
individually as a “Grantor”) and
JPMORGAN CHASE BANK, N.A., a national banking association, in its capacity
as
administrative agent (the “Administrative
Agent”) for the lenders party to either or both of the Credit Agreements
referred to below (collectively, the “Lenders”).
PRELIMINARY
STATEMENT
The
Borrower, the Administrative Agent and certain of the Lenders entered into
a
Credit Agreement dated as of October 7, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “2005 Credit
Agreement”).
The
Borrower, the Administrative Agent and the Lenders entered into a Credit
Agreement dated as of February 12, 2008 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “2008 Credit
Agreement” and, collectively with the 2005 Credit Agreement, the “Credit
Agreements”).
The
Grantors and the Administrative Agent, on behalf of the Holders of Secured
Obligations, hereby agree as follows:
ARTICLE
1
DEFINITIONS
1.1.
Terms Defined in
the
Credit Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreements.
1.2.
Terms Defined in
Illinois UCC. Terms defined in the Illinois UCC which are not
otherwise defined in this Security Agreement are used herein as defined in
the
Illinois UCC.
1.3.
Definitions of Certain
Terms Used Herein. As used in this Security Agreement, in
addition to the terms defined in the Preliminary Statement, the following terms
shall have the following meanings:
“Accounts”
shall
have
the meaning set forth in Article 9 of the Illinois UCC.
“Article”
means
a
numbered article of this Security Agreement, unless another document is
specifically referenced.
“Chattel
Paper” shall
have the meaning set forth in Article 9 of the Illinois UCC.
“Collateral”
means
all
Receivables, Inventory and General Intangibles, wherever located, in which
the
Grantor now has or hereafter acquires any right or interest, and the proceeds,
insurance proceeds and products thereof, together with all books and records,
customer lists, credit files, computer files, programs, printouts and other
computer materials and records related thereto; provided that,
notwithstanding the foregoing, “Collateral” shall not include the Excluded
Collateral.
“Control”
shall
have
the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105,
9-106 or 9-107 of Article 9 of the Illinois UCC.
“Credit
Card
Obligations” means any and all indebtedness and obligations of any
Grantor or any subsidiary of any Grantor to any Lender or any of its affiliates,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor) in connection with any credit cards
(including, without limitation, commercial credit cards and purchasing
cards).
“Default”
means
an
event described in Section 5.1
hereof.
“Documents”
shall
have
the meaning set forth in Article 9 of the Illinois UCC.
“Excluded
Collateral” means contractual rights to the extent and for so
long as the grant of a security interest therein pursuant hereto would violate
the terms of the agreement under which such contractual rights arise or exist,
or would give any other party the right to terminate its obligations under
such
agreement, to the extent such prohibition or right of termination is enforceable
under applicable law.
“Exhibit”
refers
to a
specific exhibit to this Security Agreement, unless another document is
specifically referenced.
“General
Intangibles”
shall have the meaning set forth in Article 9 of the Illinois UCC.
“Holders
of Secured
Obligations” means the Lenders under the 2005 Credit Agreement with
respect to the indebtedness and obligations of the Borrower under the 2005
Credit Agreement, the Lenders under the 2008 Credit Agreement with respect
to
the Obligations, as defined in the 2008 Credit Agreement and the Lenders with
claims with respect to Credit Card Obligations.
“Instruments”
shall
have the meaning set forth in Article 9 of the Illinois UCC.
“Inventory”
shall
have
the meaning set forth in Article 9 of the Illinois UCC.
2
“Receivables”
means
the Accounts, Chattel Paper, Documents, Instruments and any other rights or
claims to receive money which are General Intangibles or which are otherwise
included as Collateral.
“Required
Lenders”
means the Required Lenders under the 2005 Credit Agreement and the Required
Lenders under the 2008 Credit Agreement.
“Section”
means
a
numbered section of this Security Agreement, unless another document is
specifically referenced.
“Secured
Obligations”
means all of the indebtedness and obligations owed by the Borrower to
the
Lenders under the 2005 Credit Agreement and all “Obligations”, as defined in the
2008 Credit Agreement including, without limitation, all “Swap Obligations” as
defined in the 2008 Credit Agreement, and all Credit Card
Obligations.
The
foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
ARTICLE
II
GRANT
OF
SECURITY INTEREST
Each
of
the Grantors hereby pledges, assigns and grants to the Administrative Agent,
on
behalf of and for the ratable benefit of the Holders of Secured Obligations
and
(to the extent specifically provided herein) their Affiliates, a security
interest in all of its right, title and interest, whether now owned or hereafter
acquired, in and to the Collateral to secure the prompt and complete payment
and
performance of the Secured Obligations.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
The
Grantors represent and warrant to the Administrative Agent and the Holders
of
Secured Obligations that:
3.1
Title, Authorization, Validity and
Enforceability. Each Grantor has good and valid rights in or
the power to transfer the Collateral owned by it and title to the Collateral
with respect to which it has purported to grant a security interest hereunder,
free and clear of all Liens except for Liens permitted under Section 4.1.3 hereof,
and has full corporate, limited liability company or partnership, as applicable,
power and authority to grant to the Administrative Agent the security interest
in such Collateral pursuant hereto. The execution and delivery by
each Grantor of this Security Agreement have been duly authorized by proper
corporate, limited liability company or partnership, as applicable, proceedings,
and this Security Agreement constitutes a legal, valid and binding obligation
of
each Grantor and creates a security interest which is enforceable against it
in
all Collateral it now owns or hereafter acquires, except as enforceability
may
be limited by (i) bankruptcy, insolvency, fraudulent conveyances, reorganization
or similar laws relating to or affecting the enforcement of creditors’ rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law), and (iii) requirements of reasonableness,
good faith and fair dealing. When financing statements have been
filed in the appropriate offices against each Grantor in the locations listed
on
Exhibit B, the
Administrative Agent will have a fully perfected first priority security
interest in the Collateral owned by each Grantor in which a security interest
may be perfected by filing, subject only to Liens permitted under Section 4.1.3
hereof.
3
3.2 Conflicting
Laws and Contracts. Neither the execution
and delivery by the Grantors of this Security Agreement, the creation and
perfection of the security interest in the Collateral granted hereunder, nor
compliance with the terms and provisions hereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on any
Grantor, or (ii) any Grantor’s charter, articles, partnership agreement or
by-laws (or similar constitutive documents), or (iii) the provisions of any
indenture, instrument or agreement to which any Grantor is a party or is
subject, or by which it, or its property may be bound or affected, or conflict
with or constitute a default thereunder, or result in or require the creation
or
imposition of any Lien in, of or on the property of any Grantor pursuant to
the
terms of any such indenture, instrument or agreement (other than any Lien of
the
Administrative Agent on behalf of the Holders of Secured Obligations or any
Liens permitted by Section 4.1.3
hereof).
3.3. Principal
Location. Each Grantor’s mailing address and the location of
its place of business (if it has only one) or its chief executive office (if
it
has more than one place of business), is disclosed in Exhibit
A. Each Grantor’s jurisdiction of organization is as set forth
on the table in Section
3.7.
3.4. No
Other Names;
Etc. Within the last five (5) years, no Grantor has changed
its jurisdiction of formation, merged with or into or consolidated with any
other corporation, except as disclosed in Exhibit
A. The name in which each Grantor has executed this Security
Agreement is the exact name as it appears, and as it has (except as disclosed
in
Exhibit A)
appeared for the last five (5) years, in such Grantor’s organizational
documents, as amended, as filed with its jurisdiction of organization as of
the
date hereof.
3.5. No
Default. No Default or Event of Default has occurred and is
continuing.
3.6. No
Financing
Statements. No financing statement describing all or any
portion of the Collateral which has not lapsed or been terminated naming any
Grantor as debtor has been filed in any jurisdiction except financing statements
(i) naming the Administrative Agent on behalf of the Holders of Secured
Obligations as the secured party and (ii) in respect of Liens permitted by
Section 6.02 of the Credit Agreements.
3.7.
Federal Employer Identification Number;
State Organization Number; Jurisdiction of Organization. Each
Grantor’s federal employer identification number is, and if such Grantor is a
registered organization, such Grantor’s State of organization, type of
organization and State of organization identification number is, as
follows:
4
|
GRANTOR
|
Federal
Employer
Identification
Number
|
Type
of
Organization
|
State
of
Organization
or
Incorporation
|
State
Organization
Number
|
|
Xxxxxxx
Outdoors Inc.
|
00-0000000
|
Corporation
|
Wisconsin
|
J016324
|
|
Old
Town Canoe Company
|
00-0000000
|
Corporation
|
Delaware
|
0806383
|
|
Techsonic
Industries, Inc.
|
00-0000000
|
Corporation
|
Alabama
|
000-834
|
|
Under
Sea Industries, Inc.
|
00-0000000
|
Corporation
|
Delaware
|
0798857
|
|
Xxxxxxx
Marine Electronics LLC
|
00-0000000
|
Limited
Liability Company
|
Delaware
|
4502630
|
|
Scubapro
U.S. LLC
|
00-0000000
|
Limited
Liability Company
|
Delaware
|
4502633
|
|
Outdoor
Equipment Group LLC
|
00-0000000
|
Limited
Liability Company
|
Delaware
|
4502636
|
ARTICLE
IV
COVENANTS
From
the
date of this Security Agreement and thereafter until this Security Agreement
is
terminated, each Grantor agrees:
4.1 General.
4.1.1
Inspection. Each Grantor
will, and will cause each of its Subsidiaries to, permit the Administrative
Agent or any Holder of Secured Obligations, by its representatives and agents
(i) to inspect the Collateral, (ii) to examine and make copies of the records
of
such Grantor and its Subsidiaries relating to the Collateral and (iii) to
discuss the Collateral and the related records of such Grantor and its
Subsidiaries with, and to be advised as to the same by, such Grantor’s officers
and employees (and, in the case of any Receivable, with any person or entity
which is or may be obligated thereon so long as, if no Default has occurred
and
is continuing, such Grantor shall be provided the opportunity to be present
during such discussions), all at such reasonable times and intervals as the
Administrative Agent or such Holder of Secured Obligations may determine, and
all at such Grantor’s expense; provided that, so
long as no Default has occurred and is continuing, only two inspections of
the
Collateral per fiscal year pursuant to clause (i) of this Section 4.1.1 shall
be at the Grantors’ expense.
5
4.1.2
Financing Statements and Other Actions;
Defense of Title. Each Grantor hereby authorizes the Administrative
Agent to file, and if requested will execute and deliver to the Administrative
Agent, all financing statements describing the Collateral owned by the Grantors
and other documents and take such other actions as may from time to time
reasonably be requested by the Administrative Agent in order to maintain a
first
perfected security interest in and,
if
applicable, Control of, the Collateral owned by the Grantors, subject to Liens
permitted under Section 6.02 of the Credit Agreements. Such financing
statements may describe the Collateral in the same manner as described herein
or
may contain an indication or description of collateral that describes such
property in any other manner as the Administrative Agent may determine, in
its
reasonable discretion, is necessary, advisable or prudent to ensure that the
perfection of the security interest in the Collateral granted to the
Administrative Agent herein, including, without limitation, describing such
property as “all assets” or “all personal property, whether now owned or
hereafter acquired.” The Grantors will take any and all actions reasonably
necessary to defend title to the Collateral owned by any Grantor against all
persons and to defend the security interest of the Administrative Agent in
such
Collateral and the respective priority thereof (in accordance with the terms
hereof and the Credit Agreements) against any Lien.
4.1.3
Liens. The Grantors will
not create, incur, or suffer to exist any Lien on the Collateral owned by any
Grantor except Liens
permitted
pursuant to Section 6.02 of the Credit Agreements.
4.1.4
Change in Corporate Existence, Type
or
Jurisdiction of Organization, Location, Name. Each Grantor
will:
(i) preserve
its existence and corporate structure as in effect on the date hereof;
and
(ii) not
change its jurisdiction of organization,
unless,
in each such case, such Grantor shall have given the Administrative Agent not
less than 30 days’ (or such shorter period agreed to by the Administrative
Agent) prior written notice of such event or occurrence and the Administrative
Agent shall have either (x) reasonably determined that such event or occurrence
will not adversely affect the validity, perfection or priority of the
Administrative Agent’s security interest in the Collateral, or (y) taken such
steps (with the cooperation of such Grantor to the extent necessary or
advisable) as are reasonably necessary or advisable to properly maintain the
validity, perfection and priority of the Administrative Agent’s security
interest in the Collateral owned by such Grantor.
4.1.5 Other Financing
Statements. No Grantor will suffer to exist or authorize the filing
of any financing statement naming it as debtor covering all or any portion
of
the Collateral owned by such Grantor, except any financing statement authorized
under Section
4.1.2 hereof.
6
ARTICLE
V
DEFAULT
5.1. The occurrence of any one or more of the following events
shall constitute a Default:
5.1.1 The
breach by any Grantor of any of the terms or provisions of Section
4.1.3.
5.1.2 The
breach by any Grantor (other than a breach which constitutes a Default under
Section 5.1.1
hereof) of any of the terms or provisions of this Security Agreement which
is
not remedied within 30 days after the giving of written notice to such Grantor
by the Administrative Agent.
5.1.3 The
occurrence of any “Event of Default” under, and as defined in, the 2005 Credit
Agreement or the 2008 Credit Agreement.
5.2. Upon
the acceleration of the Secured Obligations, the Secured Obligations
shall immediately become due and payable without presentment, demand, protest
or
notice of any kind, all of which are hereby expressly waived, and the
Administrative Agent may, with the concurrence or at the direction of the
Required Lenders, exercise any or all of the following rights and
remedies:
5.2.1 Those
rights and remedies provided in this Security Agreement, the Credit Agreements,
or any other Loan Document, provided that this
Section 5.2.1
shall not be understood to limit any rights or remedies available to the
Administrative Agent and the Holders of Secured Obligations prior to a
Default.
5.2.2 Those
rights and remedies available to a secured party under the Illinois UCC (whether
or not the Illinois UCC applies to the affected Collateral) or under any other
applicable law (including, without limitation, any law governing the exercise
of
a bank’s right of setoff or bankers’ lien) when a debtor is in default under a
security agreement.
5.2.3 Without
notice except as specifically provided in Section 8.1 hereof or
elsewhere herein and in accordance with applicable law, sell, lease, assign,
grant an option or options to purchase or otherwise dispose of the Collateral
or
any part thereof in one or more parcels at public or private sale, for cash,
on
credit or for future delivery, and upon such other terms as the Administrative
Agent may deem commercially reasonable.
The
Administrative Agent, on behalf of the Holders of Secured Obligations, may
comply with any applicable state or federal law requirements in connection
with
a disposition of the Collateral, and such compliance will not be considered
to
adversely affect the commercial reasonableness of any sale of the
Collateral.
7
5.3. Grantors'
Obligation Upon
Default. Upon the request of the Administrative Agent after the
occurrence and continuance of a Default, the Grantors will:
5.3.1
Assembly of Collateral.
Assemble and make available
to the Administrative Agent the
Collateral and all records relating thereto at any place or places reasonably
selected by the Administrative Agent.
5.3.2
Secured Party Access.
Permit the Administrative
Agent, or the Administrative Agent’s representatives
and agents, to enter any premises where all or any part of the Collateral,
or
the books and records relating thereto, or both, are located, to take possession
of all or any part of the Collateral and to remove all or any part of the
Collateral.
5.4. License.
The
Administrative
Agent is hereby granted a non-exclusive license or other right to use, following
the occurrence and during the continuance of a Default, without charge, each
Grantor’s labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, service marks, customer lists and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in
completing production of, advertising for sale, and selling any Collateral,
and,
following the occurrence and during the continuance of a Default, each Grantor’s
rights under all licenses and all franchise agreements shall inure to the
Administrative Agent’s benefit. In addition, each Grantor hereby
irrevocably agrees that the Administrative Agent may, following the occurrence
and during the continuance of a Default, sell any of such Grantor’s Inventory
directly to any person, including without limitation persons who have previously
purchased such Grantor’s Inventory from such Grantor and in connection with any
such sale or other enforcement of the Administrative Agent’s rights under this
Security Agreement, may sell Inventory which bears any trademark owned by or
licensed to any Grantor and any Inventory that is covered by any copyright
owned
by or licensed to any Grantor and the Administrative Agent may finish any work
in process and affix any trademark owned by or licensed to any Grantor and
sell
such Inventory as provided herein.
ARTICLE
VI
WAIVERS
AMENDMENTS AND REMEDIES
No
delay
or omission of the Administrative Agent or any Holder of Secured Obligations
to
exercise any right or remedy granted under this Security Agreement shall impair
such right or remedy or be construed to be a waiver of any Default or an
acquiescence therein, and any single or partial exercise of any such right
or
remedy shall not preclude any other or further exercise thereof or the exercise
of any other right or remedy. No waiver, amendment or other variation
of the terms, conditions or provisions of this Security Agreement whatsoever
shall be valid unless in writing signed by the Administrative Agent with the
concurrence or at the direction of the (a) Required Lenders and (b)
the Grantors, and then only to the extent in such writing specifically set
forth. All rights and remedies contained in this Security Agreement
or by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Holders of Secured Obligations until the Secured
Obligations have been paid in full.
8
ARTICLE
VII
GENERAL
PROVISIONS
7.1. Notice
of Disposition of Collateral;
Condition of Collateral. The Grantors hereby waive notice of the
time and place of any public sale or the time after which any private sale
orother
disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made
shall
be deemed reasonable if sent to the Grantors, addressed as set forth in Article VIII, at
least ten (10) days prior to (i) the date of any such public sale or (ii) the
time after which any such private sale or other disposition may be
made. The Administrative Agent shall have no obligation to clean-up
or otherwise prepare the Collateral for sale.
7.2. Compromises
and Collection of
Collateral. The Grantors and the Administrative Agent recognize
that setoffs, counterclaims, defenses and other claims may be asserted by
obligors with respect to certain of the Receivables, that certain of the
Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, the Grantors agree that
the Administrative Agent may at any time and from time to time, if a Default
has
occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Administrative
Agent
in its sole reasonable discretion shall determine or abandon any Receivable,
and
any such action by the Administrative Agent shall be commercially reasonable
so
long as the Administrative Agent acts in good faith based on information known
to it at the time it takes any such action.
7.3. Secured
Party Performance of Grantor's
Obligations. Without having any obligation to do so, the
Administrative Agent may perform or pay any obligation which any Grantor has
agreed to perform or pay in this Security Agreement and the Grantors shall
reimburse the Administrative Agent for any reasonable amounts paid by the
Administrative Agent pursuant to this Section
7.3. The Grantors’ obligation to reimburse the Administrative
Agent pursuant to the preceding sentence shall be a Secured Obligation payable
no later than fifteen (15) days after written demand therefor.
7.4. Authorization
for Secured Party to Take
Certain Action. The Grantors irrevocably authorize the
Administrative Agent at any time and from time to time in the sole discretion
of
the Administrative Agent and appoint the Administrative Agent as each Grantor’s
attorney-in-fact (i) to execute on behalf of any Grantor as debtor and to file
financing statements necessary or desirable in the Administrative Agent’s sole
discretion to perfect and to maintain the perfection and priority of the
Administrative Agent’s security interest in the Collateral, (ii) upon the
occurrence and the continuance of a Default, to indorse and collect any cash
proceeds of the Collateral, (iii) to file a carbon, photographic or other
reproduction of this Security Agreement or any financing statement with respect
to the Collateral as a financing statement and to file any other financing
statement or amendment of a financing statement (which does not add new
collateral or add a debtor) in such offices as the Administrative Agent in
its
sole discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the Administrative Agent’s security interest in the
Collateral, (iv) upon the occurrence and the continuance of a Default, to
enforce payment of the Instruments, Accounts and Receivables in the name of
the
Administrative Agent or any Grantor, (v) to apply the proceeds of any Collateral
received by the Administrative Agent to the Secured Obligations and (vi) to
discharge past due taxes, assessments, charges, fees or Liens on the Collateral
(except for such Liens as are specifically permitted hereunder or under any
other Loan Document or which are being contested in goodfaith
pursuant to any other Loan Document), and the Grantors agree to reimburse the
Administrative Agent within fifteen (15) days of written demand for any
reasonable payment made or any reasonable expense incurred by the Administrative
Agent in connection therewith, provided that this authorization shall not
relieve the Grantors of any of their obligations under this Security Agreement
or under the Credit Agreements.
9
7.5. Specific
Performance of Certain
Covenants. The Grantors acknowledge and agree that a breach of any
of the covenants contained in Sections 4.1.3 or
5.3
will cause
irreparable injury to the Administrative Agent and the Holders of Secured
Obligations, that the Administrative Agent and Holders of Secured Obligations
have no adequate remedy at law in respect of such breaches and therefore agrees,
without limiting the right of the Administrative Agent or the Holders of Secured
Obligations to seek and obtain specific performance of other obligations of
the
Grantors contained in this Security Agreement, that the covenants of the
Grantors contained in the Sections referred to in this Section 7.5 shall be
specifically enforceable against the Grantors.
7.6 Use
and Possesion of Certain
Premises. Upon the occurrence and during the continuance of a
Default, the Administrative Agent shall be entitled to occupy and use any
premises owned or leased by any Grantor where any of the Collateral or any
records relating to the Collateral are located until the Secured Obligations
are
paid in full or the Collateral is removed therefrom, whichever first occurs,
without any obligation to pay the Grantors for such use and
occupancy.
7.7 Benefits
of Agreement. The terms
and provisions of this Security Agreement shall be binding upon and inure to
the
benefit of the Grantors, the Administrative Agent and the Holders of Secured
Obligations and their respective successors and assigns (including all persons
who become bound as a debtor to this Security Agreement), except that the
Grantors shall not have the right to assign its rights or delegate their
obligations under this Security Agreement or any interest herein, without the
prior written consent of the Administrative Agent.
7.8. Survival
of Representations. All
representations and warranties of the Grantors contained in this Security
Agreement shall survive the execution and delivery of this Security
Agreement.
7.9. Taxes
and Expenses. Any taxes
(including income taxes) payable or ruled payable by Federal or State authority
in respect of this Security Agreement shall be paid by the Grantors, together
with interest and penalties, if any, subject to Grantors’ right to contest such
taxes pursuant to Section 5.04 of the Credit Agreements. The Grantors
shall reimburse the Administrative Agent for any and all reasonable
out-of-pocket expenses and internal charges (including reasonable attorneys’,
auditors’ and accountants’ fees and reasonable time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Administrative
Agent) paid or incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, collection and enforcement
of
this Security Agreement and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including the reasonable expenses and
charges associated with any periodic or special audit of the Collateral; provided, however,
that if no
Default has occurred and is continuing, only two suchperiodic
or special audits of the Collateral in any fiscal year shall be at the expense
of the Grantor). Any and all costs and expenses incurred by the
Grantors in the performance of actions required pursuant to the terms hereof
shall be borne solely by the Grantors.
10
7.10.
Headings. The title of and
section headings in this Security Agreement are for convenience of reference
only, and shall not govern the interpretation of any of the terms and provisions
of this Security Agreement.
7.11
Termination. This
Security Agreement shall continue in effect (notwithstanding the fact that
from
time to time there may be no Secured Obligations outstanding) until (i) the
Credit Agreement has terminated pursuant to its express terms and (ii) all
of
the Secured Obligations have been paid in cash and performed in full and no
commitments of the Administrative Agent or the Holders of Secured Obligations
which would give rise to any Secured Obligations are outstanding.
7.12
Entire Agreement. This
Security Agreement embodies the entire agreement and understanding between
the
Grantors and the Administrative Agent relating to the Collateral and supersedes
all prior agreements and understandings between the Grantors and the
Administrative Agent relating to the Collateral.
7.13 Governing
Law; Jurisdiction; Waiver of Jury Trial.
7.13.1 THIS
SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW
OF THE STATE OF ILLINOIS.
7.13.2 Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the courts of the State of
Illinois sitting in Xxxx County and of the United States District Court of
the
Northern District of Illinois, and any appellate court from any thereof, in
any
action or proceeding arising out of or relating to this Security Agreement
or
any other Loan Document, or for recognition or enforcement of any judgment,
and
each Grantor hereby irrevocably and unconditionally agrees that all claims
in
respect of any such action or proceeding may be heard and determined in such
Illinois State or, to the extent permitted by law, in such Federal
court. Each Grantor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions
by
suit on the judgment or in any other manner provided by law. Nothing
in this Security Agreement or any other Loan Document shall affect any right
that the Administrative Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Security Agreement or any other Loan
Document against any Grantor or its properties in the courts of any
jurisdiction.
7.13.3 Each
Grantor hereby irrevocably and unconditionally waives, to the fullest extent
it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of
or
relating to this Security Agreement or any other Loan Document in any court
referred to in Section
7.13.2. Each Grantor hereby irrevocably waives, to the fullest
extent permitted by law,the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
11
7.13.4 Each
party to this Security Agreement irrevocably consents to service of process
in
the manner provided for notices in Article VIII of this
Security Agreement. Nothing in this Security Agreement or any other
Loan Document will affect the right of any party to this Security Agreement
to
serve process in any other manner permitted by law.
7.13.5 WAIVER
OF
JURY TRIAL. EACH GRANTOR HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF
OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT (WHETHER
BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH GRANTOR ACKNOWLEDGES
THAT IT HAS BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT AND THE OTHER
LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN
THIS SECTION.
7.14 Indemnity. The
Grantors hereby jointly and severally agree to indemnify the Administrative
Agent and the Holders of Secured Obligations, and their respective successors,
assigns, agents and employees, from and against any and all liabilities,
damages, penalties, suits, costs, and expenses of any kind and nature
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Administrative Agent or any Holder of Secured
Obligations is a party thereto) imposed on, incurred by or asserted against
the
Administrative Agent or the Holders of Secured Obligations, or their respective
successors, assigns, agents and employees, in any way relating to or arising
out
of this Security Agreement, or the manufacture, purchase, acceptance, rejection,
ownership, delivery, lease, possession, use, operation, condition, sale, return
or other disposition of any Collateral (including, without limitation, latent
and other defects, whether or not discoverable by the Administrative Agent
or
the Holders of Secured Obligations or the Grantors, and any claim for patent,
trademark or copyright infringement), provided that such indemnity shall not,
as
to any indemnitee, be available to the extent that such losses, claims, damages,
penalties, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from
the gross negligence, bad faith or willful misconduct of such
indemnitee.
7.15 Severability. Any
provision in this Security Agreement that is held to be inoperative,
unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction,
be
inoperative, unenforceable, or invalid without affecting the remaining
provisions in that jurisdiction or the operation, enforceability, or validity
of
that provision in any other jurisdiction, and to this end the provisions of
this
Security Agreement are declared to be severable.
7.16 Counterparts. This
Security Agreement may be executed in counterparts (and by different parties
hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single
contract. Delivery of an executedcounterpart
of a signature page of this Security Agreement by telecopy shall be effective
as
delivery of a manually executed counterpart of this Security
Agreement.
12
ARTICLE
VIII
NOTICES
8.1 Sending
Notices. Any notice
required or permitted to be given under this Security Agreement shall be sent
(and deemed received) in the manner and to the addresses set forth in Section
9.01 of the Credit Agreements.
8.2 Change
in Address for
Notices. Each of the Grantors, the Administrative Agent and
the Lenders may change the address for service of notice upon it by a notice
in
writing to the other parties.
ARTICLE
IX
THE
ADMINISTRATIVE AGENT
JPMorgan
Chase Bank, N.A. has been appointed Administrative Agent for the Holders of
Secured Obligations hereunder pursuant to Article VIII of the Credit
Agreements. It is expressly understood and agreed by the parties to
this Security Agreement that any authority conferred upon the Administrative
Agent hereunder is subject to the terms of the delegation of authority made
by
the Holders of Secured Obligations to the Administrative Agent pursuant to
the
Credit Agreement, and that the Administrative Agent has agreed to act (and
any
successor Administrative Agent shall act) as such hereunder only on the express
conditions contained in such Article VIII. Any successor
Administrative Agent appointed pursuant to Article VIII of the Credit Agreements
shall be entitled to all the rights, interests and benefits of the
Administrative Agent hereunder.
[SIGNATURE
PAGES TO FOLLOW]
13
IN
WITNESS WHEREOF, each of the Grantors and the Administrative Agent have executed
this Security Agreement as of the date first above written.
|
XXXXXXX
OUTDOORS INC.
BY:
/s/ Xxxxx X.
Xxxxxxx
Name: Xxxxx
X. Xxxxxxx
Title: Chief
Financial Officer
|
|
OLD
TOWN CANOE COMPANY
BY:
/s/ Xxxxxx X.
Xxxxxxxxxx
Name: Xxxxxx
X. Xxxxxxxxxx
Title: Treasurer
|
|
TECHSONIC
INDUSTRIES, INC.
BY:
/s/ Xxxxxx X.
Xxxxxxxxxx
Name: Xxxxxx
X. Xxxxxxxxxx
Title: Secretary
and Treasurer
|
|
UNDER
SEA INDUSTRIES, INC.
BY:
/s/ Xxxxxx X.
Xxxxxxxxxx
Name: Xxxxxx
X. Xxxxxxxxxx
Title: Director
|
|
XXXXXXX
MARINE ELECTRONICS LLC
BY:
/s/ Xxxxxx X.
Xxxxxxxxxx
Name: Xxxxxx
X. Xxxxxxxxxx
Title: Secretary
|
|
SCUBAPRO
U.S. LLC
BY:
/s/ Xxxxxx X.
Xxxxxxxxxx
Name: Xxxxxx
X. Xxxxxxxxxx
Title: Secretary
|
|
OUTDOOR
EQUIPMENT GROUP LLC
BY:
/s/ Xxxxxx X.
Xxxxxxxxxx
Name: Xxxxxx
X. Xxxxxxxxxx
Title: Secretary
and Treasurer
|
14
JPMORGAN
CHASE BANK, N.A., as Administrative Agent
BY:
/s/ Xxxxx
X.
Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title: Vice
President
15
EXHIBIT
A
(See
Sections 3.3
and 3.4 of
Security Agreement)
|
Prior
names, jurisdiction of formation, place of business (if Grantor has
only
one place of business), chief executive office (if Grantor has more
than
one place of business), mergers and mailing
address:
|
|
Company
Name and Address
|
Place
of Incorporation
|
|
Xxxxxxx
Outdoors Inc.
Racine
Operations
000
Xxxx Xxxxxx
Xxxxxx,
XX 00000
|
Wisconsin,
USA
|
|
Old
Town Canoe Company, Inc.
00
Xxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
|
Xxxxxxxx,
XXX
|
|
Techsonic
Industries Inc.
000
Xxxxxxxxxx Xxxx
Xxxxxxx,
XX 00000
|
Xxxxxxx,
XXX
|
|
Under
Sea Industries, Inc.
c/o
Johnson Outdoors Inc.
000
Xxxx Xxxxxx
Xxxxxx,
XX 00000
|
Xxxxxxxx,
XXX
|
|
Xxxxxxx
Marine Electronics LLC
0000
X. Xxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
|
Xxxxxxxx,
XXX
|
|
Scubapro
U.S. LLC
1166
– A Xxxxxx Street
El
Cajon, CA 92020
|
Delaware,
USA
|
|
Outdoor
Equipment Group LLC
000
Xxxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
|
Delaware,
USA
|
16
EXHIBIT
B
(See
Section 3.1 of Security Agreement)
OFFICES
IN WHICH FINANCING STATEMENTS HAVE BEEN FILED
|
Grantor
|
Filing
Office
|
|
Xxxxxxx
Outdoors Inc.
|
Wisconsin
Department of Financial Institutions
|
|
Old
Town Canoe Company
|
Delaware
Secretary of State
|
|
Techsonic
Industries, Inc.
|
Alabama
Secretary of State
|
|
Under
Sea Industries, Inc.
|
Delaware
Secretary of State
|
|
Marine
Electronics Group LLC
|
Delaware
Secretary of State
|
|
Scubapro
U.S. LLC
|
Delaware
Secretary of State
|
|
Outdoor
Equipment Group LLC
|
Delaware
Secretary of State
|
17
