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XXXXXXX OUTDOORS INC.
SECOND AMENDMENT AND WAIVER TO NOTE AGREEMENT
Dated as of December 13, 2001
Re:
Note Agreement dated as of September 15, 1997
and
$25,000,000 7.15% Senior Notes, due October 15, 2007
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XXXXXXX OUTDOORS INC.
0000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
SECOND AMENDMENT AND WAIVER TO NOTE AGREEMENT
Dated as of December 13, 2001
Re: Note Agreement dated as of September 15, 1997
and
$25,000,000 7.15% Senior Notes due October 15, 2007
To The Northwestern Mutual
Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Note Agreement dated as of September 15, 1997,
as amended by the First Amendment to Note Agreement dated as of February 1, 2000
(the "Note Agreement"), between Xxxxxxx Outdoors Inc. (formerly known as Xxxxxxx
Worldwide Associates Inc.), a Wisconsin corporation (the "Company"), and you,
under and pursuant to which $25,000,000 7.15% Senior Notes due October 15, 2007
(the "Notes") of the Company were originally issued. Terms used but not
otherwise defined herein shall have the meanings set forth in the Note
Agreement.
The Company hereby requests that you accept the waivers and amendments
set forth in this Second Amendment and Waiver to Note Agreement (the "Second
Amendment to Note Agreement") in the manner herein provided:
ARTICLE 1.
WAIVER OF NOTE AGREEMENTS
Section 1.1. Waiver of Default under Section 5.6(b). Pursuant to that
certain Three Year Revolving Credit Agreement dated as of August 31, 2001
between the Company and the financial institutions named therein (the "Bank
Credit Agreement"), certain Subsidiaries of the Company entered into guaranties
of Indebtedness outstanding under the Bank Credit Agreement. The amount of
Indebtedness outstanding under the Bank Credit Agreement exceeds the aggregate
principal amount of Indebtedness which is permitted to be outstanding in respect
of Restricted Subsidiaries of the Company under and pursuant to Section 5.6(b)
of the Note Agreement. The Noteholder first named above hereby waives any
Default or Event of Default which shall exist, or shall have existed, under
Sections 5.6(b) and 6.1(f) of the Note Agreement
during the period beginning on August 31, 2001 to and including the date hereof
solely on account of such guaranties under the Bank Credit Agreement.
ARTICLE 2.
AMENDMENT OF NOTE AGREEMENT
Section 2.1. Amendment of Section 1. Section 1 of the Note Agreement
shall be and is hereby amended by the addition thereto of a new Section 1.3 to
read as follows:
Section 1.3. Subsidiary Guaranty. The payment by the Company
of all amounts due with respect to the Notes and the performance by the
Company of its obligations under this Agreement will be absolutely and
unconditionally guaranteed by the Subsidiary Guarantors pursuant to the
Subsidiary Guaranty (the "Subsidiary Guaranty"), which shall be in
substantially the form attached hereto as Exhibit E.
Payments under the Subsidiary Guaranties shall be subject to
the terms of an Intercreditor Agreement dated as of December 13, 2001
(the "Intercreditor Agreement") which shall be in substantially the
form attached hereto as Exhibit F among the Purchaser, the banks which
are parties to the Bank Credit Agreement and certain other creditors of
the Company which are beneficiaries of Guaranties by Subsidiary
Guarantors.
Section 2.2. Amendment to Section 5.6(b). Section 5.6(b) of the Note
Agreement shall be and is hereby amended in its entirety so that the same shall
read as follows:
(b) The Company will not at any time permit the sum of (i)
Current Debt and Funded Debt of Restricted Subsidiaries (other than
Current Debt and Funded Debt owed to the Company or an Eighty
Percent-Owned Restricted Subsidiary and Excluded Subsidiary
Obligations), plus (ii) Funded Debt of the Company and Restricted
Subsidiaries secured by Liens permitted by ss.5.7(a)(9) to exceed 25%
of Consolidated Tangible Assets.
Section 2.3. Amendment of Section 5.6. Section 5.6 of the Note
Agreement shall be and is hereby amended by the addition thereto of two new
subsections 5.6(f) and 5.6(g) to read as follows:
(f) The Company will not at any time permit Indebtedness of
Foreign Subsidiaries outstanding pursuant to the Bank Credit Agreement
to exceed 10.5% of Consolidated Tangible Assets.
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(g) The Company will not permit any Restricted Subsidiary to
become a direct borrower, co-obligor or guarantor under the Bank Credit
Agreement; provided that (i) Foreign Subsidiaries may become direct
borrowers under the Bank Credit Agreement within the limitations of
this ss.5.6, and (ii) subject to ss.5.17, Subsidiary Guarantors may be
obligated on the subsidiary guaranties under the Bank Credit Agreement.
Section 2.4. Amendment to Section 5.16(e). The proviso beginning in the
third to the last line of Section 5.16(e) of the Note Agreement shall be and is
hereby amended in its entirety so that the same shall read as follows:
provided further, that such certificates as are delivered with respect
to (i) the period provided for in paragraph (b) above, shall include a
list of any changes in Restricted Subsidiaries as at the end of such
period, and (ii) the periods provided for in paragraphs (a) and (b)
above shall set forth for each Restricted Subsidiary, the amount of
Indebtedness of such Restricted Subsidiary outstanding at the end of
such period together with a brief description of such Indebtedness.
Section 2.5. Amendment to Section 5. Section 5 of the Note Agreement
shall be and is hereby amended by the addition thereto of a new Section 5.17 to
read as follows:
Section 5.17. Subsidiary Guaranty. The Company will cause each
Subsidiary which is, or becomes, a guarantor of Indebtedness under the
Bank Credit Agreement (excluding any Foreign Subsidiary which borrows
amounts denominated in its local currency (and Guaranties of such
borrowings by other Foreign Subsidiaries)) to be a party to the
Subsidiary Guaranty. In the case of any such Subsidiary which becomes a
guarantor under the Bank Credit Agreement after the date of the
Closing, concurrently with such Subsidiary becoming a guarantor under
the Bank Credit Agreement, the Company will deliver to each holder of
the Notes the following items:
(i) a joinder agreement in respect of the Subsidiary Guaranty
which shall have been duly executed by such Subsidiary;
(ii) a certificate signed by the President, a Vice President
or another authorized Responsible Officer of the Company making
representations and warranties to the effect of those contained in
Paragraphs 10 and 12 of Exhibit B, with respect to such Subsidiary and
the Subsidiary Guaranty, as applicable; and
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(iii) an opinion of counsel (who may be in-house counsel for
the Company) addressed to each of the holders of the Notes satisfactory
to the holders of a majority in principal amount of the Notes
outstanding at the time, to the effect that the joinder to the
Subsidiary Guaranty has been duly authorized, executed and delivered by
such Subsidiary and that the Subsidiary Guaranty constitutes the legal,
valid and binding contract and agreement of such Subsidiary Guarantor
enforceable in accordance with its terms, except as an enforcement of
such terms may be limited by bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
Section 2.6. Amendment to Section 5. Section 5 of the Note Agreement
shall be and is hereby amended by the addition thereto of a new subsection 5.18
to read as follows:
Section 5.18. Restrictions on Subsidiaries. The Company will
not, and will not permit any Restricted Subsidiary to, agree to or
otherwise permit to exist any contractual limitation on the payment of
dividends or other distributions to the Company.
Section 2.7. Amendment to Section 6.1. Section 6.1 of the Note
Agreement shall be and is hereby amended by changing paragraphs "(i)", "(j)" and
"(k)" of Section 6.1 to read as paragraphs "(j)", "(k)" and "(l)", respectively,
and by the addition of a new paragraph (i), to read as follows:
(i) the Subsidiary Guaranty ceases to be in full force and
effect or any Subsidiary Guarantor shall contest or deny in writing the
validity or enforceability of any of its obligations under the
Subsidiary Guaranty; or
Section 2.8. Amendment to Section 6.3. Section 6.3 of the Note
Agreement shall be and is hereby amended by (a) changing the reference to
paragraph "(i)" in the third line of such Section 6.3 to read as paragraph "(j)"
and (b) changing the reference to "paragraph (j) or (k)" in the tenth line of
such Section 6.3 to read as "paragraph (k) or (l)."
Section 2.9. Amendment to Section 6.4. Section 6.4 of the Note
Agreement shall be and is hereby amended by changing the reference to paragraph
"(i)" in the fourth line of such Section 6.4 to read as paragraph "(j)."
Section 2.10. Amendment to Section 8.1. The definition of Funded Debt in
Section 8.1 of the Note Agreement shall be and is hereby amended by the addition
thereto of the following sentence to read as follows:
For purposes of any determination of under this Agreement, revolving
credit Indebtedness under the Bank Credit Agreement
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shall not be deemed to be Funded Debt except to the extent that such
Indebtedness shall be included in the Average Outstanding Balance of
Consolidated Current Debt determined in accordance with ss.5.6.
Section 2.11. New Definitions in Section 8.1. Section 8.1 to the Note
Agreement shall be and is hereby amended to include the following new
definitions in alphabetical order:
"Bank Credit Agreement" means that certain Three Year Revolving Credit
Agreement dated as of August 31, 2001, by and among the Company, and the
financial institutions named therein, as amended, supplemented, renewed or
restated and any replacement facility which constitutes the primary bank credit
facility of the Company.
"Excluded Subsidiary Obligations" shall mean (a) the Subsidiary
Guaranty and any other Guaranty of Indebtedness of the Company or another
Restricted Subsidiary by a Subsidiary Guarantor, and (b) obligations of a
Subsidiary Guarantor as co-obligor with the Company or another Restricted
Subsidiary on Indebtedness under note agreements, loan agreements or credit
agreements (other than the Bank Credit Agreement); provided that each creditor
which is the beneficiary of any such Guaranty or which is a party to any such
note agreement, loan agreement or credit agreement (or an agent acting on its
behalf) shall have become a party to the Intercreditor Agreement.
"Foreign Subsidiary" means any Subsidiary of the Company organized
under the laws of a jurisdiction other than the United States or any
jurisdiction thereof.
"Intercreditor Agreement" is defined in ss.1.3.
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Subsidiary Guarantor" means each of the domestic Subsidiaries of the
Company on the date of this Agreement and each other Subsidiary of the Company
that subsequent to the date of this Agreement becomes a party to the Subsidiary
Guaranty in accordance with ss.5.17 of this Agreement.
"Subsidiary Guaranty" is defined in ss.1.3.
ARTICLE 3.
WARRANTIES AND REPRESENTATIONS
The Company represents and warrants that as of the date hereof:
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Section 3.1. Second Amendment to Note Agreement is Legal and
Authorized. (a) The execution and delivery of the Second Amendment to Note
Agreement by the Company and compliance by the Company with all of the
provisions of the Note Agreement, as amended by the Second Amendment to Note
Agreement--
(i) is within the corporate powers of the Company; and
(ii) will not violate any provisions of any law or any order
of any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company.
(b) The execution and delivery of the Second Amendment to Note
Agreement has been duly authorized by proper corporate action on the part of the
Company (no action by the stockholders of the Company being required by law, by
the Articles of Incorporation or By-laws of the Company or otherwise); and the
Second Amendment to Note Agreement has been executed and delivered by the
Company and the Note Agreement, as amended by the Second Amendment to Note
Agreement, constitutes the legal, valid and binding obligation, contract and
agreement of the Company enforceable in accordance with its terms.
Section 3.2. No Defaults. Upon the effectiveness of this Second
Amendment to Note Agreement, no Default or Event of Default shall exist or be
continuing.
ARTICLE 4.
MISCELLANEOUS
Section 4.1. Ratification of Note Agreement. Except as herein expressly
amended, the Note Agreement is in all respects ratified and confirmed. If and to
the extent that any of the terms or provisions of the Note Agreement is in
conflict or inconsistent with any of the terms or provisions of this Second
Amendment to Note Agreement, this Second Amendment to Note Agreement shall
govern.
Section 4.2. No Legend Required. References in the Note Agreement or in
any Note, certificate, instrument or other document to the Note Agreement shall
be deemed to be references to the Note Agreement as amended hereby and as
further amended from time to time.
Section 4.3. Successors and Assigns. This Second Amendment to Note
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of you and to the benefit of your successors and
assigns, including each successive holder or holders of any Notes.
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Section 4.4. Requisite Approval; Expenses. This Second Amendment to
Note Agreement shall not be effective until (a) the Company and the holders of
at least 70% in aggregate principal amount of outstanding Notes shall have
executed this Second Amendment to Note Agreement, (b) you shall have received an
opinion of Xxxxx & Xxxxxxx, counsel for the Company, in form and substance
satisfactory to you and any other holder of Notes covering the matters set forth
in Exhibit A and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request, (c) the
Company shall have delivered to you an Officer's Certificate making
representations and warranties to the effect of those contained in Paragraphs 10
and 12 of Exhibit B to the Note Agreement, with respect to the Subsidiary
Guarantors and the Subsidiary Guaranty, (d) each Subsidiary Guarantor of the
Company shall have executed and delivered to you a counterpart of the Subsidiary
Guaranty, (e) the Fifth Amendment and Waiver to that certain Note Agreement
dated as of October 1, 1995 shall have been executed and delivered in
substantially the same form as this Second Amendment to Note Agreement, (f) the
Intercreditor Agreement shall have been executed and delivered by you, the banks
which are parties to the Bank Credit Agreement and certain other creditors of
the Company which are beneficiaries of Guaranties by Subsidiary Guarantors, and
(g) the Company shall have paid all out-of-pocket expenses incurred by you in
connection with the consummation of the transactions contemplated by this Second
Amendment to Note Agreement, including, without limitation, the fees, expenses
and disbursements of Xxxxxxx and Xxxxxx which are reflected in statements of
such counsel rendered on or prior to the effective date of this Second Amendment
to Note Agreement.
Section 4.5. Table of Contents. The Table of Contents of the Note
Agreement shall be and is hereby amended to reflect the changes made to section
title headings herein.
Section 4.6. Counterparts. This Second Amendment to Note Agreement may
be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
Section 4.7. Governing Law. The Note Agreement as amended by this
Second Amendment to Note Agreement and the Notes shall be governed by and
construed in accordance with Wisconsin law, including all matters of
construction, validity and performance.
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IN WITNESS WHEREOF, the Company has executed this Second Amendment to
Note Agreement as of the day and year first above written.
XXXXXXX OUTDOORS INC.
By /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Its Treasurer
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This Second Amendment to Note Agreement is accepted and agreed to as of
the day and year first above written.
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By /s/ X. X. Xxxxxx
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X. X. Xxxxxx
Its Authorized Representative
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