XXXXXXX OUTDOORS INC.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxx 00000
CONSENT AND AMENDMENT
Dated as of September 6, 2002
Re: Note Agreements dated as of October 1, 1995
and
$30,000,000 7.77% Senior Notes, Series A,
Due October 15, 2005
and
$15,000,000 6.98% Senior Notes, Series B,
Due October 15, 2005
To the Purchasers Named
on Schedule I hereto
Ladies and Gentlemen:
Reference is made to the separate Note Agreements dated as of October
1, 1995, as amended by that certain First Amendment to Note Agreements dated as
of October 31, 1996, and that Second Amendment to Note Agreements dated as of
September 30, 1997, and that Third Amendment to Note Agreements dated as of
October 3, 1997, and that Fourth Amendment to Note Agreements dated as of
January 10, 2000, and that Fifth Amendment and Waiver to Note Agreements dated
as of December 13, 2001 (the Note Agreements as amended the "Note Agreements")
between Xxxxxxx Outdoors Inc., a Wisconsin corporation (the "Company"), and each
of you, under and pursuant to which $30,000,000 7.77% Senior Notes, Series A,
due October 15, 2005 and $15,000,000 6.98% Senior Notes, Series B, due October
15, 2005, of the Company were originally issued. Terms used but not otherwise
defined herein shall have the meanings set forth in the Note Agreements.
The Company hereby requests that each of you consent to the Sale
Transaction (defined below) and agree to the amendment of the Note Agreement
relating thereto set forth below in the manner herein provided:
ARTICLE 1
CONSENT AND AMENDMENT
Section 1.1. Consent to Sale Transaction. The Company has advised each
of you of its plans to sell all of the stock of its Xxxx Xxxxxxxx subsidiary for
net cash proceeds of approximately $61,000,000, which sale is expected to be
consummated on or prior to
September 30, 2002 (the "Sale Transaction"). Consummation of the Sale
Transaction would exceed the limitations on sales of assets set forth in Section
5.8 of the Note Agreements. Subject to all of the terms and conditions hereof,
the Noteholders hereby consent to the Sale Transaction provided, that (a) the
Sale Transaction shall occur on or before September 30, 2002, (b) the Sale
Transaction is for consideration consisting of at least eighty-five percent
(85%) cash, (c) the sale price is for not less than fair market value (as
determined in good faith by the Company's board of directors), and (d) after
giving effect to such sale, no Default or Event of Default shall exist.
Section 1.2. Amendment of Note Agreement. You hereby consent to the
amendments of the Note Agreement hereinafter set forth for the purpose of
permitting the Sale Transaction:
(a) Section 5.8(b)(1) of the Note Agreement shall be amended to read as
follows:
(1) either (i) the net book value of such assets, when added
to the net book value of all other assets sold, leased, transferred or
otherwise disposed of by the Company and its Restricted Subsidiaries
pursuant to this ss.5.8(b)(1) during the immediately preceding
twelve-month period do not constitute (x) 10% of Consolidated Total
Assets prior to the consummation of the sale of all of the stock of its
Xxxx Xxxxxxxx Subsidiary (the "Sale Transaction"), (y) 15% of
Consolidated Total Assets during the 12 month period beginning with the
date upon which the Sale Transaction is consummated, and (z) 10% of
Consolidated Total Assets at all times thereafter (in each case
determined as of the end of the immediately preceding fiscal quarter)
or (ii) the sum of the portions of Consolidated Net Income contributed
for the immediately preceding twelve-month period (each as determined
in good faith by the chief financial officer of the Company) by (A)
such assets, (B) each Restricted Subsidiary (or portion thereof)
disposed of during such period and (C) other assets of the Company and
its Restricted Subsidiaries disposed of during such period pursuant to
this ss.5.8(b)(1) do not constitute (x) 10% of Consolidated Net Income
prior to the consummation of the Sale Transaction, (y) the portion of
Consolidated Net Income attributable to the assets which were sold in
the Sale Transaction, plus 3% of Consolidated Net Income during the 12
month period beginning with the date upon which the Sale Transaction is
consummated, and (z) 10% of Consolidated Net Income for such period at
all times thereafter; and
(b) the proviso to Section 5.8 shall be amended to read as follows:
provided, however, that notwithstanding the foregoing, any sale,
transfer, issuance or other disposition of shares pursuant to
ss.ss.5.8(c)(3) or 5.8(c)(4) may not be consummated if either (i) the
net book value of the assets of such Restricted Subsidiary attributable
to such sale, transfer, issuance or other disposition of shares when
added to the net book value of all other assets sold, leased,
transferred or otherwise disposed of by the Company and its Restricted
Subsidiaries during the immediately preceding twelve-month period would
constitute (x) 10% of Consolidated Total Assets prior to the
consummation of the Sale Transaction, (y) 15% of Consolidated Total
Assets during the 12 month period beginning with the date upon which
the Sale Transaction is consummated, and (z) 10% of Consolidated Total
Assets at all times thereafter (in each case determined as of the end
of the immediately preceding fiscal quarter), or (ii) the portions of
Consolidated Net Income for the immediately preceding twelve-month
period contributed (each as determined in good faith by the chief
financial officer of the Company) by (1) such assets, (2) each
Restricted Subsidiary (or portion thereof) disposed of during such
period and (3) other assets of the Company and its Restricted
Subsidiaries sold, leased, transferred or otherwise disposed of by the
Company and its Restricted Subsidiaries during such period would exceed
(x) 10% of Consolidated Net Income prior to the consummation of the
Sale Transaction, (y) the portion of Consolidated Net Income
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attributable to the assets which were sold in the Sale Transaction,
plus 3% of Consolidated Net Income during the 12 month period beginning
with the date upon which the Sale Transaction is consummated, and (z)
10% of Consolidated Net Income for such period at all times thereafter.
ARTICLE 2
WARRANTIES AND REPRESENTATIONS
The Company represents and warrants that as of the date hereof:
Section 2.1. Consent and Amendment is Legal and Authorized. (a) The
execution and delivery of this Consent and Amendment by the Company and
compliance by the Company with all of the provisions of the Note Agreements --
(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 this Consent and Amendment 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 this Consent and
Amendment has been executed and delivered by the Company and the Note Agreements
constitute the legal, valid and binding obligation, contract and agreement of
the Company enforceable in accordance with their terms.
Section 2.2. No Defaults. Upon effectiveness of this Consent and
Amendment no Default or Event of Default will exist or be continuing.
Section 2.3. Compensation. The Company has paid no fee or other
remuneration to any Person (other than legal fees) in connection with the
solicitation of (i) this Consent and Amendment, or (ii) any other waiver,
consent or amendment which relates to the Sale Transaction under any agreement
pursuant to which indebtedness of the Company is outstanding.
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ARTICLE 3
CONDITIONS PRECEDENT
This Consent and Amendment shall be effective as of September 6, 2002
upon the fulfillment by the Company of the conditions precedent set forth below.
The closing date for this Consent and Amendment (the "Closing Date") shall be
subject to the fulfillment by the Company of the following conditions precedent:
Section 3.1. Execution and Delivery. This Consent and Amendment shall
have been executed and delivered by the Company and the holders of at least 70%
in aggregate principal amount of the Notes.
Section 3.2. Consent of Subsidiary Guarantors. The Subsidiary
Guarantors shall have executed and delivered the Consent attached hereto as
Exhibit A.
Section 3.3. Other Consents. The Company shall have obtained consents
and waivers under each of the other agreements pursuant to which indebtedness of
the Company is outstanding and such other consents and waivers shall be in
substantially the same form as this Consent and Amendment or shall have such
changes as shall be reasonably acceptable to you.
Section 3.4. Payment of Special Counsel Fees. The Company shall have
paid the reasonable fees and disbursements of your special counsel for which the
Company shall have received an invoice at least one business day prior to the
Closing Date.
ARTICLE 4
MISCELLANEOUS
Section 4.1. Ratification of Note Agreements. Except as herein
expressly provided, each of the Note Agreements is in all respects ratified and
confirmed. If and to the extent that any of the terms or provisions of the Note
Agreements is in conflict or inconsistent with any of the terms or provisions of
this Consent and Amendment, this Consent and Amendment shall govern.
Section 4.2. Counterparts. This Consent and Amendment may be
simultaneously executed in any number of counterparts, and all such counterparts
together, each as an original, shall constitute but one and the same instrument.
Section 4.3. Reference to the Note Agreements. Any and all notices,
requests, certificates and any other instruments, including the Notes, may refer
to the Note Agreements or the Note Agreements dated as of October 15, 1995,
without making specific reference to this Consent and Amendment, but all such
references shall be deemed to include this Consent and Amendment.
Section 4.4. Governing Law. The Note Agreements 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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Section 4.5. Successors and Assigns. This Consent and Amendment shall
be binding upon the Company and its successors and assigns and shall inure to
the benefit of each of you and to the benefit of your successors and assigns,
including each successive holder or holders of any Notes.
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IN WITNESS WHEREOF, the Company has executed this Consent and Amendment
as of the day and year first above written.
XXXXXXX OUTDOORS INC.
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Treasurer
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NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: Associate Vice President
GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
Investments
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Investments
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CONSENT OF SUBSIDIARY GUARANTORS
The undersigned Subsidiary Guarantors, as party to the Guaranty
Agreement dated as of December 13, 2001 (the "Guaranty Agreement"), hereby (i)
consent to the Consent and Amendment dated as of even date herewith to which
this consent is attached, (ii) confirm that the Guaranty Agreement remains in
full force and effect after giving effect to the Consent and Amendment, and
(iii) represent and warrant that no defense, counterclaim or offset of any type
or nature exists under the Guaranty Agreement.
Dated as of September 6, 2002
SUBSIDIARY GUARANTORS:
LEISURE LIFE LIMITED
EXTRASPORT, INC.
OLD TOWN CANOE COMPANY
UNDER SEA INDUSTRIES, INC.
By:/s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Its: Secretary
