Exhibit 10.22

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered
into as of December 22 2011, by and between LACROSSE FOOTWEAR, INC., a Wisconsin
corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

RECITALS

Borrower and Bank are parties to that certain Second Amended and Restated Credit
Agreement dated as of March 1, 2009 (as previously amended, the “Existing
Agreement”). Borrower has requested that Bank extend or continue credit to
Borrower as described below, and Bank has agreed to provide such credit to
Borrower on the terms and conditions contained herein. For ease of reference,
the parties have decided to amend and restate the Existing Agreement in its
entirety.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Bank and Borrower hereby agree as follows:

ARTICLE I

CREDIT TERMS

SECTION 1.1. LINE OF CREDIT.

(a) Line of Credit. Subject to the terms and conditions of this Agreement, Bank
hereby agrees to make advances to Borrower from time to time up to and including
May 1, 2015 under a revolving line of credit (“Line of Credit”) not to exceed
(i) at any time (other than during each Reduction Period, as defined below) the
aggregate principal amount of Thirty Five Million Dollars ($35,000,000.00) and
(ii) from and including January 1 through May 31 of each year (each such period,
a “Reduction Period”) the aggregate amount of Twenty-Two Million Five Hundred
Thousand Dollars ($22,500,000.00), the proceeds of which shall be used to
finance the working capital requirements and other business expenses of Borrower
and Borrower’s wholly-owned subsidiary, Danner, Inc., a Wisconsin corporation
(“Danner”), including, without limitation, loans or advances to Borrower’s
Subsidiaries that are permitted in Section 5.7. Borrower’s obligation to repay
advances under the Line of Credit shall be evidenced by that certain Replacement
Revolving Line of Credit Note of even date herewith (“Line of Credit Note”),
which note replaces that certain Revolving Line of Credit Note dated
September 16, 2011 in the principal amount of $35,000,000.00 executed and
delivered by Borrower in connection with the Existing Agreement. All terms of
the Line of Credit Note are incorporated herein by this reference.

(b) Letter of Credit Subfeature. As a subfeature under the Line of Credit, Bank
agrees from time to time during the term thereof to issue or cause an affiliate
to issue usance, standby and/or sight commercial letters of credit for the
account of Borrower to finance the backing of imports and exports (each, a
“Letter of Credit” and collectively, “Letters of Credit”); provided however,
that the aggregate undrawn amount of all outstanding Letters of Credit plus the
face amount of all outstanding drafts created under usance commercial Letter of
Credit (“Usance Drafts”) shall not at any time exceed Five Million Dollars
($5,000,000.00). The form and substance of each Letter of Credit shall be
subject to approval by Bank, in its sole discretion. No Letter of Credit shall
have an expiration date subsequent to the maturity date of the Line of Credit.
The undrawn amount of all Letters of Credit and the face amount of all
outstanding

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Usance Drafts shall be reserved under the Line of Credit and shall not be
available for borrowings thereunder. Each Letter of Credit shall be subject to
the additional terms and conditions of the Letter of Credit agreements,
applications and any related documents required by Bank in connection with the
issuance thereof. Each drawing paid under a Letter of Credit shall be deemed an
advance under the Line of Credit and shall be repaid by Borrower in accordance
with the terms and conditions of this Agreement applicable to such advances;
provided however, that if advances under the Line of Credit are not available,
for any reason, at the time any drawing is paid, then Borrower shall immediately
pay to Bank the full amount drawn, together with interest thereon from the date
such drawing is paid to the date such amount is fully repaid by Borrower, at the
highest rate of interest then applicable to advances under the Line of Credit.
In such event Borrower agrees that Bank, in its sole discretion, may debit any
account maintained by Borrower with Bank for the amount of any such drawing.
Notwithstanding the foregoing, usance commercial Letters of Credit shall contain
such provisions and be issued in such manner for such purpose as to satisfy Bank
that any banker’s acceptance created by Bank’s acceptance of a draft thereunder
shall be eligible for discount by a Federal Reserve Bank, will not result in a
liability of Bank subject to reserve requirements under any law, regulation or
administrative order, and will not cause Bank to violate any lending limit
imposed upon Bank by any law, regulation or administrative order. Usance
commercial Letters of Credit shall provide for drafts thereunder with terms that
do not exceed the lesser of 90 days or such other period of time as may be
necessary for the acceptance created thereunder to be eligible for discount and
otherwise comply with this Agreement; provided, however, that no usance
commercial Letter of Credit shall provide for drafts with a term that ends
subsequent to the maturity of the Line of Credit. The amount of each matured
Usance Draft shall be deemed an advance under the Line of Credit and shall be
repaid by Borrower in accordance with the terms and conditions of this Agreement
applicable to such advances; provided however, that if the Line of Credit is not
available, for any reason, at the time any such acceptance matures, or if
advances are not available under the Line of Credit at such time due to any
limitation on borrowings set forth herein, then Borrower shall immediately pay
to Bank the full amount of such Usance Draft, together with interest thereon
from the date such acceptance matures and is honored by Bank to the date such
amount is fully paid by Borrower, at the highest rate of interest then
applicable to advances under the Line of Credit. In such event, Borrower agrees
that Bank, in its sole discretion, may debit any account maintained by Borrower
with Bank for the amount of any such Usance Draft.

(c) Borrowing and Repayment. Borrower may from time to time during the term of
the Line of Credit borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions contained
herein or in the Line of Credit Note; provided however, that the total
outstanding borrowings, Letters of Credit and Usance Drafts under the Line of
Credit shall not at any time exceed the applicable maximum principal amount
available thereunder, as set forth above.

SECTION 1.2. INTEREST/FEES.

(a) Interest. The outstanding principal balance of each loan advance subject
hereto and the amount of each drawing paid under any Letter of Credit or Usance
Draft shall bear interest from the date of such advance or the date such drawing
is paid, respectively, to the date such amount is fully repaid by Borrower at
the rate of interest set forth in the Line of Credit Note.

(b) Computation and Payment. Interest shall be computed on the basis of a
360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in the Loan Documents (as defined below).

 

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(c) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to twenty
hundredths percent (0.20%) per annum (computed on the basis of a 360-day year,
actual days elapsed) on the average daily unused amount of the Line of Credit,
which fee shall be calculated on a monthly basis by Bank and shall be due and
payable by Borrower in arrears within fifteen (15) days after each billing is
sent by Bank. The foregoing fee shall be calculated based on a Line of Credit of
$22,500,000.00 during each Reduction Period.

(d) Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the issuance
of each Letter of Credit equal to one and three quarter percent (1.75%) per
annum (computed on the basis of a 360-day year, actual days elapsed) of the face
amount thereof, and (ii) fees upon the payment or negotiation of each drawing
under any Letter of Credit and fees upon the occurrence of any other activity
with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit and an acceptance
fee for each Usance Draft) determined in accordance with Bank’s standard fees
and charges then in effect for such activity.

SECTION 1.3. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all
principal, interest and fees due under each credit subject hereto by charging
Borrower’s deposit account number 4100055821 with Bank, or any other deposit
account maintained by Borrower with Bank, for the full amount thereof. Should
there be insufficient funds in any such deposit account to pay all such sums
when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.

SECTION 1.4. COLLATERAL.

As security for all indebtedness of Borrower to Bank subject hereto, Borrower
hereby reaffirms its prior grant of a security interest in the Existing Security
Agreement (as defined below) executed by it, and Bank and Borrower shall, and
Borrower shall cause Danner to, enter into the New Security Agreements (as
defined below), which shall amend and restate the Existing Security Agreements
in their entirety and constitute security interests of first priority (subject
to Permitted Encumbrances, as defined in Section 5.8 below) in all Collateral.

Borrower shall reimburse Bank immediately upon demand for all reasonable costs
and expenses incurred by Bank in connection with any of the foregoing security,
including without limitation, filing and recording fees.

Unless an Event of Default exists, none of Borrower nor any Material Subsidiary
shall be obligated to perfect the Bank’s security interest under a Security
Agreement by any means other than UCC financing statements and continuation
statements covering the Collateral and filings of appropriate notices of
security interests in the U.S. Patent and Trademark Office with respect to the
trademarks listed on Exhibit A attached hereto, except that:

(a) with respect to chattel paper or instruments, if the amount owing to
Borrower or a Material Subsidiary thereunder exceeds $100,000.00, Borrower or
the Material Subsidiary shall surrender possession thereof to the Bank; and

(b) with respect to raw materials and inventory of finished goods that are in
transit to the United States for which documents of title are issued, Borrower
or the Material Subsidiary shall either put Bank in possession of the documents
of title to such in-transit

 

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inventory, or there shall be a duly filed UCC-1 financing statement of record
with respect to the Borrower or the Material Subsidiary, as relevant, covering
the documents of title to such in-transit inventory.

Upon the occurrence and during the continuance of an Event of Default, Borrower
and each Material Subsidiary shall immediately execute, obtain from third
parties, deliver, file and record such documentation as Bank reasonably requires
in order to perfect the Bank’s security interest in all Collateral.

Upon Borrower’s or the relevant Material Subsidiary’s request made in connection
with sales or transfers of equipment, fixtures or improvements permitted under
Section 6(c) of the Security Agreements, while they are in effect, or the New
Security Agreements, Bank shall release its security interest therein of fact
and record.

SECTION 1.5. DEFINED TERMS.

References in this Agreement to fiscal quarters and fiscal years are to
Borrower’s fiscal quarters and fiscal years. As used herein:

“AAA” has the meaning given to it in Section 7.11(b).

“Agreement” has the meaning given to it in the Introductory Paragraph.

“Bank” has the meaning given to it in the Introductory Paragraph.

“Bankruptcy Code” has the meaning given to it in Section 6.1(f).

“Borrower” has the meaning given to it in the Introductory Paragraph.

“Business Day” means any day except a Saturday, Sunday or any other day on which
commercial banks in Oregon are authorized or required by law to close.

“Change in Control” means that (a) a majority of the directors of Borrower shall
be persons other than persons (i) for whose election proxies shall have been
solicited by the board of directors of Borrower (other than pursuant to a
solicitation Borrower or its directors are contractually required to make in
connection with a sale of any of Borrower’s equity or assets) or for whose
appointment or election is otherwise approved or ratified by the board of
directors of Borrower or (ii) who are then serving as directors appointed by the
board of directors to fill vacancies on the board of directors caused by death
or resignation (but not by removal) or to fill newly-created directorships or
(b) any “person” or “group” (as such terms are used in Section 13(d) of the
Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire whether such right is
immediately exercisable or only after the passage of time), directly or
indirectly, of Voting Stock of Borrower (or other securities convertible into
such Voting Stock) representing 30 percent or more of the combined voting power
of all Voting Stock of Borrower [(provided that any Voting Stock now or
hereafter held by Virginia Schneider and her extended family, or any heirs or
devises of Virginia Schneider and her extended family, and any trust in which
Virginia Schneider and/or her extended family are beneficiaries, and the
beneficiaries of such trusts, and the transferees, successors and assigns of any
of the foregoing, shall be excluded from calculation for the purposes of this
clause (b))]. For this

 

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purposes, “Voting Stock” means capital stock of Borrower the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors of Borrower, even though the right to so vote has been
suspended by the happening of a contingency.

“Collateral” means all property and rights and interests in property of Borrower
and Danner that is subject to any Security Agreement.

“Current Ratio” has the meaning given to it in Section 4.9(d).

“Daily One Month LIBOR” has the meaning given to it in the Line of Credit Note”

“Danner” has the meaning given to it in Section 1.1(a).

“Event of Default” has the meaning given to it in Section 6.1.

“Existing Agreement” has the meaning given to it in the Recital.

“Existing Security Agreement” means either (i) the Security Agreement for the
benefit of Bank dated as of April 15, 2004 executed and delivered by Borrower
(as amended, modified or supplemented prior to the date hereof) or (ii) the
Third Party Security Agreement for the benefit of Bank dated as of April 15,
2004 executed and delivered by Danner (as amended, modified or supplemented
prior to the date hereof).

“ERISA” has the meaning given to it in Section 2.9.

“Foreign Subsidiary” means a Subsidiary that is a “controlled foreign
corporation” as that term is used in Section 956 of the Internal Revenue Code.

“GAAP” means generally accepted accounting principles in effect in the United
States (or with respect to a foreign Subsidiary, in the country of its formation
or operations), consistently applied.

“Letter of Credit” has the meaning given to it in Section 1.1(b).

“Line of Credit Note” has the meaning given to it in Section 1.1(a).

“Loan Documents” has the meaning given to it in Section 2.2.

“material” and “material adverse effect” have the meanings given to them in
Section 2.11.

“Material Subsidiary” means Danner and any direct or indirect Subsidiary of
Borrower that (including, without duplication, the assets and revenues of its
own Subsidiaries) represents ten percent or more of the consolidated assets or
consolidated revenues of Borrower.

“New Security Agreement” means any one of the following executed and delivered
contemporaneously herewith for the benefit of Bank, as amended, modified or
supplemented from time to time: (i) executed by Borrower: (A) Security Agreement
– Equipment and (B) Continuing Security Agreement – Rights to Payment and
Inventory; and (ii) executed by Danner: (A) Third Party Security Agreement –
Equipment and (B) Third Party Security Agreement – Rights to Payment and
Inventory.

 

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“Permitted Encumbrances” has the meaning given to it in Section 5.8.

“Permitted Transactions” has the meaning given to it in Section 5.5.

“Plan” has the meaning given to it in Section 2.9.

“Prior Note” has the meaning given to it in Section 1.1(a).

“Reduction Period” has the meaning given to it in Section 1.1(a).

“Rules” has the meaning given to it in Section 7.11(b).

“Security Agreement” means any Existing Security Agreement or, upon its
amendment and restatement by any New Security Agreement, the relevant New
Security Agreement.

“Subordinated Debt” has the meaning given to it in Section 4.9(a).

“Subsidiary” of a person or entity means a corporation, partnership, joint
venture, limited liability company or other business entity of which more than
50% of the stock or other equity interests having ordinary voting power for the
election of directors, managing general partners or other governing body (other
than stock or other equity interests having such power only by reason of the
happening of a contingency) 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 or entity.

“Tangible Net Worth” has the meaning given to it in Section 4.9(a).

“Third Party Obligor” has the meaning given to it in Section 6.1(d).

“Total Liabilities” has the meaning given to it in Section 4.9(b).

“Usance Draft” has the meaning given to it in Section 1.1(b)

In this Agreement words denoting the singular shall include the plural, and vice
versa, and words denoting any gender shall include all genders.

All accounting terms used in the Loan Documents shall be construed, and all
financial records and reports prepared or provided pursuant to the Loan
Documents shall be prepared in a consistent manner, in accordance with 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 Borrower or Bank
shall so request, Borrower and Bank shall negotiate in good faith to amend such
ratio or requirement to preserve the original intent thereof in light of such
change in GAAP; 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) Borrower shall provide to the Bank 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.

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.

SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized and
existing and in good standing under the laws of Wisconsin, and is qualified or
licensed to do business (and is in good standing as a foreign corporation, if
applicable) in all jurisdictions in which such qualification or licensing is
required or in which the failure to so qualify or to be so licensed could have a
material adverse effect on Borrower.

SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each promissory
note, contract, instrument and other document required hereby or at any time
hereafter delivered to Bank in connection herewith (collectively, the “Loan
Documents”) have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of Borrower or the party (other than Bank) which
executes the same, enforceable in accordance with their respective terms.

SECTION 2.3. NO VIOLATION. The execution, delivery and performance by Borrower
of each of the Loan Documents do not violate any provision of any law or
regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.

SECTION 2.4. LITIGATION. As of the date hereof, there are no pending, or to the
best of Borrower’s knowledge material threatened, actions, claims,
investigations, suits or proceedings by or before any governmental authority,
arbitrator, court or administrative agency with uninsured claim(s) in excess of
$2,000,000.00, individually or, with respect to the claims of any one claimant,
in the aggregate, or which could reasonably expected to have a material adverse
effect on the operation of Borrower other than those disclosed by Borrower to
Bank in writing prior to the date hereof.

SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The annual financial statement
of Borrower dated December 31, 2010, and all interim quarterly financial
statements delivered to Bank since said date, true copies of which have been
delivered by Borrower to Bank prior to the date hereof, (a) are complete and
correct and present fairly Borrower’s financial condition and results of
operations as of the date thereof and for the period covered thereby,
(b) disclose all liabilities of Borrower as of December 31, 2010 that were
required to be reflected or reserved against under GAAP, whether liquidated or
unliquidated, fixed or contingent, and (c) have been prepared in accordance with
GAAP, provided that each interim quarterly financial statement is subject to and
exclusive of normal year-end audit adjustments and the addition of certain
footnotes. Since the date of such financial statement there has been no material
adverse change in the financial condition of Borrower, nor has Borrower
mortgaged, pledged, granted a security interest in or otherwise encumbered any
of its assets or properties except in favor of Bank, Permitted Encumbrances, or
as otherwise permitted by Bank in writing.

 

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SECTION 2.6. INCOME TAX RETURNS. As of the date hereof, Borrower has no
knowledge of any pending assessments or adjustments of its income tax payable
with respect to any year, provided, routine tax examinations with respect to
which no underreporting or misreporting of material information by Borrower is
asserted by the relevant taxing authority or is known to Borrower’s officers do
not constitute breaches of this representation and warranty.

SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture, contract or
instrument to which Borrower is a party or by which Borrower may be bound that
requires the subordination in right of payment of any of Borrower’s obligations
subject to this Agreement to any other obligation of Borrower.

SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and
rights to all trademarks, trade names, patents, and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law, except to the extent that non-compliance with
the foregoing could not be reasonably expected to have a material adverse effect
of Borrower’s consolidated operations or financial condition.

SECTION 2.9. ERISA. Borrower is in compliance in all material respects with all
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended or recodified from time to time (“ERISA”); Borrower has not materially
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a “Plan”); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under GAAP.

SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in material default on any
obligation for borrowed money, any purchase money obligation in excess of
$1,000,000.00 or any other material lease, commitment, contract, instrument or
obligation.

SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in
writing prior to the date hereof, (a) Borrower is in compliance in all material
respects with all applicable federal or state environmental, hazardous waste,
health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower’s operations and/or properties,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may be
amended, modified or supplemented from time to time, which, if not complied
with, could reasonably be expected to have a material adverse effect on
Borrower, (b) none of the operations of Borrower is the subject of any federal
or state investigation evaluating whether any remedial action involving a
material expenditure is needed to respond to a release of any toxic or hazardous
waste or substance into the environment and (c) Borrower has no material
contingent liability in connection with any release of any toxic or hazardous
waste or substance into the environment. As used herein, the term “material” or
“material adverse effect” means an expenditure or liability of $2,000,000.00 or
greater.

SECTION 2.12. SUBSIDIARIES. As of the date hereof, Borrower’s direct and
indirect Subsidiaries are: (a) Danner; (b) Lacrosse International, Inc., an
Oregon corporation; (c) LaCrosse International Holdings, Inc., an Oregon
corporation; (d) LaCrosse Europe ApS, a Danish company; and (e) LaCrosse
Footwear Canada, Inc., a Canadian corporation.

 

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ARTICLE III

CONDITIONS OF EACH EXTENSION OF CREDIT

The obligation of Bank to make each extension of credit requested by Borrower
hereunder shall be subject to the fulfillment to Bank’s satisfaction of each of
the following conditions:

(a) Compliance. The representations and warranties contained herein and in each
of the other Loan Documents shall be true in all material respects on and as of
the date of the signing of this Agreement and on the date of each extension of
credit by Bank pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and on
each such date, no Event of Default as defined herein, and no condition, event
or act which with the giving of notice or the passage of time or both would
constitute such an Event of Default, shall have occurred and be continuing or
shall exist.

(b) Documentation. Bank shall have received all additional documents which may
be required in connection with such extension of credit.

(c) Additional Letter of Credit Documentation. Prior to the issuance of each
Letter of Credit, Bank shall have received a Letter of Credit Agreement in the
Lender’s customary form, properly completed and duly executed by Borrower.

ARTICLE IV

AFFIRMATIVE COVENANTS

Borrower covenants that so long as Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall (and, with respect to Sections 4.2, 4.4, 4.5,
4.6, and 4.7, shall cause the Material Subsidiaries to), unless Bank otherwise
consents in writing:

SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or
other liabilities due under any of the Loan Documents at the times and place and
in the manner specified therein, and immediately upon demand by Bank, the amount
by which the outstanding principal balance of any credit subject hereto at any
time exceeds any limitation on borrowings applicable thereto.

SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with GAAP, and permit any representative of Bank, at any reasonable
time, to inspect, audit and examine such books and records, to make copies of
the same, and to inspect the properties of Borrower and/or the Material
Subsidiaries.

SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form
and detail satisfactory to Bank:

(a) not later than 90 days after and as of the end of each fiscal year, an
audited financial statement of Borrower, prepared by a certified public
accountant acceptable to Bank, to include balance sheet and income statement;

 

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(b) not later than 45 days after and as of the end of each fiscal quarter, a
financial statement of Borrower, prepared by Borrower, to include balance sheet
and income statement;

(c) contemporaneously with each annual and quarterly financial statement of
Borrower required hereby, a certificate of the president or chief financial
officer of Borrower that (a) said financial statements are accurate and fairly
present in all material respects the financial conditions, results of operations
and cash flows of Borrower (and in the case of financial statements presented
for the first, second and third fiscal quarters of the Borrower, subject to
normal year-end audit adjustments and the absence of footnotes), (b) to the
knowledge of such officer there exists no Event of Default nor any condition,
act or event which with the giving of notice or the passage of time or both
would constitute an Event of Default, and (c) discloses the names of all
Subsidiaries that in the preceding fiscal quarter have become Material
Subsidiaries;

(d) concurrently with the annual reports provided to Lender under
Section 4.3(a), a copy of the Borrower’s Securities and Exchange Commission 10-K
filing covering the same fiscal year, and concurrently with the quarterly
financial statements provided to Lender under Section 4.3(b), a copy of the
Borrower’s Securities and Exchange Commission 10-Q filing covering the same
fiscal quarter; and

(e) from time to time such other information as Bank may reasonably request.

SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its and the Material Subsidiaries’ businesses; and comply with the
provisions of all documents pursuant to which Borrower is organized and/or which
govern Borrower’s and the Material Subsidiaries’ continued existence and with
the requirements of all laws, rules, regulations and orders of any governmental
authority applicable to Borrower, the Material Subsidiaries and/or their
business, except to the extent that non-compliance with the foregoing could not
be reasonably expected to have a material adverse effect on Borrower’s
consolidated operations or financial condition.

SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the types and in
amounts customarily carried in lines of business similar to that of Borrower and
Danner, including but not limited to fire, extended coverage, public liability,
flood, cargo, property damage and workers compensation, with all such insurance
carried with companies and in amounts reasonably satisfactory to Bank, and
deliver to Bank from time to time at Bank’s request schedules setting forth all
insurance then in effect. Notwithstanding any provision to the contrary herein
or in any other Loan Document, Borrower and the Material Subsidiaries may use
insurance proceeds paid by reason of damage to or destruction of Collateral or
for liabilities to repair or replace such Collateral or to discharge covered
liabilities (if no Event of Default then exists), (for which purpose Bank will
promptly execute the necessary pay orders or will release insurance proceeds)
provided, that any such proceeds not so used within 30 days after receipt
thereof by Borrower or the Material Subsidiaries shall be applied to reduce the
outstanding principal balance of the Line of Credit.

SECTION 4.6. FACILITIES. Keep all properties useful or necessary to Borrower’s
or the Material Subsidiaries’ businesses in good repair and condition, and from
time to time make necessary repairs, renewals and replacements thereto so that
such properties shall be fully and efficiently preserved and maintained, except
to the extent that non-compliance with the foregoing could not be reasonably
expected to have a material adverse effect of Borrower’s consolidated operations
or financial condition.

 

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SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all
indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower or any Material
Subsidiary may in good faith contest or as to which a bona fide dispute may
arise, and (b) for which Borrower or such Material Subsidiary has made
provision, in accordance with GAAP, for eventual payment thereof in the event
Borrower is obligated to make such payment.

SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower or Danner with a claim(s) in
excess of an aggregate of $2,000,000.00.

SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s consolidated financial
condition as follows using GAAP (except to the extent modified by the
definitions herein):

(a) Tangible Net Worth, determined as of the end of each fiscal quarter, not
less than $45,000,000.00, increasing (on a permanent and cumulative basis) as of
the end of each fiscal quarter (commencing September 25, 2011), by an amount
equal to 25% of Borrower’s net income after taxes in the fiscal quarter then
most recently ended (with no deduction for losses), with “Tangible Net Worth”
defined as the aggregate of total stockholders’ equity plus Subordinated Debt
less any intangible assets, and with “Subordinated Debt” defined as indebtedness
subordinated in right of payment to Borrower’s indebtedness to Bank pursuant to
subordination agreements satisfactory to Bank.

(b) Total Liabilities divided by Tangible Net Worth not greater than 1.50 to 1.0
determined as of the end of each fiscal quarter, with “Total Liabilities”
defined as the aggregate of current and non-current liabilities less
Subordinated Debt, and with Tangible Net Worth. Borrower will not change its
fiscal year.

(c) Net income after taxes not less than $1.00 on a trailing four-quarter basis,
determined as of each fiscal quarter end.

(d) Current Ratio not less than 1.75 to 1.0, determined as of the end of each
fiscal quarter end, with “Current Ratio” defined as the ratio of current assets
to total current liabilities, and with current liabilities hereby deemed to
include, without limitation, the then outstanding principal amount of all
liabilities under the Line of Credit.

SECTION 4.10. NOTICE TO BANK. Promptly after an officer of Borrower becomes
aware of (but in no event more than five (5) days after an officer of Borrower
becomes aware of the occurrence of each such event or matter) give written
notice to Bank in reasonable detail of (a) the occurrence of any Event of
Default, or any condition, event or act which with the giving of notice or the
passage of time or both would constitute an Event of Default; (b) any change in
the name or the organizational structure of Borrower; (c) the occurrence and
nature of any Reportable Event or Prohibited Transaction, each as defined in
ERISA, or any funding deficiency with respect to any Plan; or (d) any
termination or cancellation (without prior or concurrent renewal or replacement)
of any insurance policy which Borrower is required to maintain, or any uninsured
or partially uninsured loss of or damage to property in the amount of
$2,000,000.00 or more.

 

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SECTION 4.11. NEW MATERIAL SUBSIDIARY. In the event that, at any time,
non-Material Subsidiaries of Borrower (including, without duplication, such
Subsidiaries’ Subsidiaries) represent, in the aggregate, more than 20% of the
consolidated assets or consolidated revenues of Borrower, Borrower shall, in
writing to Bank, given concurrently with the reports given to Bank pursuant to
section 4.3(c), designate sufficient non-Material Subsidiaries to be (and which
shall be) deemed for all purposes Material Subsidiaries such that the remaining
non-Material Subsidiaries no longer represent more than 20% of the consolidated
assets or consolidated revenues of Borrower. New Material Subsidiaries shall be
deemed as such for purposes of the relevant representations, warranties,
affirmative and negative covenants and Events of Default at the beginning of the
Borrower’s fiscal quarter that immediately follows the fiscal quarter in which
the new Material Subsidiary became a Material Subsidiary. Borrower shall cause
each Subsidiary that becomes a Material Subsidiary after the date hereof to
execute (promptly after becoming a Material Subsidiary) Security Agreements in
substantially the form of the New Security Agreements executed by Danner,
provided, however, that (a) no such action shall be required with respect to a
Foreign Subsidiary and (b) any security interest granted in the voting stock (or
equivalent equity interests) of a Foreign Subsidiary shall be limited to 65% of
each class of such Foreign Subsidiary’s outstanding voting stock (or equivalent
equity interests).

ARTICLE V

NEGATIVE COVENANTS

Borrower further covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not (and will not cause or permit the
Material Subsidiaries to) without Bank’s prior written consent:

SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof.

SECTION 5.2. DIVIDENDS, DISTRIBUTIONS. In any fiscal year, in excess of an
aggregate of $12,000,000.00 in any fiscal year: pay any dividend or distribution
either in cash, stock or any other property on Borrower’s stock now or hereafter
outstanding, or redeem, retire, repurchase or otherwise acquire any shares of
any class of Borrower’s stock now or hereafter outstanding.

SECTION 5.3. CAPITAL EXPENDITURES. Make any additional investment in fixed
assets in any fiscal year in excess of an aggregate of $8,000,000.00.

SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower and the Material
Subsidiaries to Bank, (b) purchase money indebtedness incurred and liens
therefor in connection with the purchase of equipment (including leases required
to be capitalized under GAAP) and/or real estate for an aggregate purchase price
not to exceed $2,000,000.00 in any fiscal year, (c) any other liabilities of
Borrower existing as of, and disclosed to Bank prior to, the date hereof,
including without limitation that certain loan to Borrower from the State of
Oregon, acting by and through its Oregon Business Development Department, in the
original principal amount of $300,000, (d) indebtedness or liabilities secured
by Permitted Encumbrances, and (e) other such indebtedness or liabilities that
are not in excess of $1,000,000.00 at any one time.

 

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SECTION 5.5. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity other than: (a) the merger of a Material
Subsidiary into Borrower, and (b) Permitted Transactions (as defined below);
make any substantial change in the nature of Borrower’s business as conducted as
of the date hereof; acquire all or substantially all of the assets of any other
entity other than Permitted Transactions; or sell, lease, transfer or otherwise
dispose of all or a substantial or material portion of Borrower’s assets except
(w) in the ordinary course of its business, (y) the sale of bad or doubtful
accounts (provided that all net proceeds of such sales are promptly applied to
reduce the outstanding principal balance of the Line of Credit) or (z) as
permitted in the Security Agreements executed by Borrower and the Material
Subsidiaries. “Permitted Transactions” means (i) mergers with other entities
whose businesses are substantially similar to that of Borrower’s or Danner’s so
long as Borrower or a Material Subsidiary is the surviving entity, (ii) the
acquisition by Borrower or a Material Subsidiary of all or substantially all of
the assets of other entities or divisions thereof, (iii) the acquisition by
Borrower or a Material Subsidiary of not less than a majority of the outstanding
ownership interests in other entities; and if, with respect to each of the
foregoing, and prior to entering into a definitive agreement, (aa) Borrower
demonstrates to Bank’s satisfaction, on a pro forma basis, that Borrower will
remain in compliance with all of the financial covenants set forth in
Section 4.9, and (bb) no breach of this Agreement or any other Loan Document
would exist following such transaction, and (iv) the formation of a Subsidiary
of Borrower and any loan or advance to, investment in, or sale or contribution
of inventory to, such Subsidiary permitted by Section 5.7 below.

SECTION 5.6. GUARANTIES. Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower or any Material
Subsidiary as security for, any liabilities or obligations of any other person
or entity, except any of the foregoing in favor of Bank.

SECTION 5.7. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or
investments in any person or entity, except (a) any such loans, advances or
investments existing as of, and disclosed to Bank prior to, the date hereof,
(b) loans or advances to employees or officers of Borrower or its Subsidiaries
of Borrower as permitted by law, and (c) loans or advances to, or investments
in, or credit balances owing from sales of inventory to, or contribution of
inventory to, any direct or indirect Subsidiary of Borrower.

SECTION 5.8. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, all or any portion of Borrower’s or any
Material Subsidiary’s assets now owned or hereafter acquired, except (i) any of
the foregoing in favor of Bank, (ii) purchase money liens in equipment and real
estate, as applicable, purchased with the proceeds of the indebtedness or leased
as described in Section 5.4(b), and (iii) Permitted Encumbrances. The term
“Permitted Encumbrances” is defined as any of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced, or that arc contested in good faith and for which adequate
reserves are maintained: (a) liens for taxes, assessments and governmental
charges or levies; (b) materialmen’s, mechanics’, carriers’, landlords’,
laborers’ stevedores’ and repairmen’s liens that exist or arise in the ordinary
course of business; (c) warehousemen’s liens incurred by third parties for
temporary storage that is not arranged by Borrower or a Subsidiary (or a freight
forwarder, agent or contractor therefor) for goods while in transit in the
ordinary course of business; (d) maritime liens that

 

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attach to the relevant property as cargo as a matter of law if the cargo is
insured against such liens under insurance that has a deductible clause not
exceeding $10,000 per occurrence; (e) purchase money security interests and
leases required to be capitalized under GAAP; (f) easements, rights of way and
other encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially and adversely affect the
use of such property for its present purpose; (g) encumbrances against fixtures
that are not granted by Borrower or Subsidiary; (h) possession of or interests
in security deposits (including interest earned thereon) held by or for the
benefit of lessors under leases (including capital leases) of real property or
equipment; (i) the effect of provisions in leases and applicable law that give
preference to Borrower’s or its Subsidiary’s landlords over proceeds of
government takings and condemnations; and (j) provisions of leases and
applicable law that convey or commit to the conveyance to landlords of fixtures
and improvements to leased premises.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.1. The occurrence of any of the following shall constitute an “Event
of Default” under this Agreement:

(a) Borrower shall fail to pay when due any principal, interest, fees or other
amounts payable under any of the Loan Documents.

(b) Any financial statement or certificate furnished to Bank in connection with,
or any representation or warranty made by Borrower or any other party under this
Agreement or any other Loan Document shall prove to be incorrect, false or
misleading in any material respect when furnished or made.

(c) Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default that by its nature can be cured, such default shall
continue unremedied for a period of twenty (20) days from its occurrence.

(d) Any default in the payment or performance of any obligation, or any defined
event of default, under the terms of any contract or instrument (other than any
of the Loan Documents) pursuant to which Borrower, a Material Subsidiary or any
guarantor hereunder (with each such guarantor referred to herein as a “Third
Party Obligor”) has incurred any debt or other liability to any person or entity
(other than to Borrower or a Subsidiary thereof), including Bank and with
respect to any such default which by its nature can be remedied, such default
shall continue unremedied for a period of twenty (20) days from its occurrence,
and, if such debt or liability is owed to a party other than Bank or an
affiliate thereof, or Borrower or a Subsidiary thereof, the amount thereof
exceeds $2,000,000.00, and either, such debt or liability is then due and
payable in full, or the holder of such debt or liability is entitled, by reason
of such default, to declare the same due and payable in full. As of the date
hereof, there are no Third Party Obligors.

(e) The filing of a judgment lien against Borrower, a Material Subsidiary or any
Third Party Obligor; or the recording of any abstract of judgment against
Borrower, a Material Subsidiary or any Third Party Obligor in any county in
which Borrower, a Material Subsidiary or such Third Party Obligor has an
interest in real property; or the service of a notice of levy and/or of a writ
of attachment or execution, or other like process, against the assets of
Borrower, a

 

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Material Subsidiary or any Third Party Obligor; or the entry of a judgment
against Borrower, a Material Subsidiary or any Third Party Obligor; and with
respect to each of the foregoing, the uninsured amount in dispute exceeds
$3,000,000.00 and the filing, recording, service, or proceeding in question is
not stayed, dismissed, or released (as applicable) or security is not posted in
a manner and amount reasonably satisfactory to Bank or the applicable court
within 60 days after its occurrence.

(f) Borrower or any Third Party Obligor shall become insolvent, or shall suffer
or consent to or apply for the appointment of a receiver, trustee, custodian or
liquidator of itself or any of its property, or shall generally fail to pay its
debts as they become due, or shall make a general assignment for the benefit of
creditors; Borrower or any Third Party Obligor shall file a voluntary petition
in bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Reform Act,
Title 11 of the United States Code, as amended or recodified from time to time
(“Bankruptcy Code”), or under any state or federal law granting relief to
debtors, whether now or hereafter in effect; or any involuntary petition or
proceeding pursuant to the Bankruptcy Code or any other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors
is filed or commenced against Borrower, a Material Subsidiary or any Third Party
Obligor (and the same is not dismissed within 60 days after its commencement),
or Borrower, a Material Subsidiary or any Third Party Obligor shall file an
answer admitting the jurisdiction of the court and the material allegations of
any such involuntary petition; or Borrower, a Material Subsidiary or any Third
Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be
entered against Borrower, a Material Subsidiary or any Third Party Obligor by
any court of competent jurisdiction under the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors.

(g) There shall exist or occur any material event or condition which Bank, in
its commercially reasonable discretion, believes impairs, or is substantially
likely to impair, the prospect of payment or performance by Borrower of its
obligations under any of the Loan Documents and the same is not remedied within
30 days after written notice from Bank to Borrower.

(h) The dissolution or liquidation of any of Borrower, a Material Subsidiary or
Third Party Obligor which is a corporation, partnership, joint venture or other
type of entity; or Borrower, Subsidiary or any such Third Party Obligor, or any
of their directors, stockholders or members, shall take action seeking to effect
the dissolution or liquidation of such Borrower, Material Subsidiary or Third
Party Obligor and such action is not dismissed or abandoned within 60 days after
its commencement.

(i) Any Change in Control of Borrower occurs.

SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) all
indebtedness of Borrower under each of the Loan Documents, any term thereof to
the contrary notwithstanding, shall at Bank’s option (or immediately upon the
occurrence of an Event of Default described in Section 6.1(f)) and without
notice become immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are hereby expressly waived by Borrower;
(b) at Bank’s option (or immediately upon the occurrence of an Event of Default
described in Section 6.1(f)), the obligation, if any, of Bank to extend any
further credit under any of the Loan Documents shall immediately cease and
terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without
limitation the right to resort to any or all security for any credit subject

 

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hereto and to exercise any or all of the rights of a beneficiary or secured
party pursuant to applicable law. All rights, powers and remedies of Bank may be
exercised at any time by Bank and from time to time after the occurrence of an
Event of Default, are cumulative and not exclusive, and shall be in addition to
any other rights, powers or remedies provided by law or equity.

ARTICLE VII

MISCELLANEOUS

SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

SECTION 7.2. NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement or the other Loan Documents must be in writing delivered to each party
at the following address:

 

BORROWER:    LACROSSE FOOTWEAR, INC.   

17634 NE Airport Way

Portland, OR 97230

Attention: President, CEO or Chief Financial Officer

BANK:   

WELLS FARGO BANK, NATIONAL ASSOCIATION

1300 S. W. Fifth Ave.

Portland, OR 97208

Attention: James Bednark, Senior Vice President

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank
immediately upon demand the full amount of all commercially reasonable payments,
advances, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all customary allocated costs of Bank’s in-house
counsel), expended or incurred by Bank in connection with the negotiation and
preparation of this Agreement and the other Loan Documents, and the preparation
of any amendments and waivers hereto and thereto, and including out of pocket
expenses incurred in the Bank’s continued administration of the Loan Documents.
The non-prevailing party shall pay to the prevailing party immediately upon
demand the full amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys’ fees (to include outside counsel fees and all
allocated costs of in-house counsel), expended or incurred by the prevailing
party in connection with (a) the enforcement of Bank’s rights and/or the
collection of any amounts which become due to Bank under any of the Loan
Documents, and (b) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for
declaratory relief, whether

 

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incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or Material Subsidiary.

SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interests or rights hereunder without
Bank’s prior written consent. Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Bank’s rights and benefits under each of the Loan Documents, subject to Bank
providing 30 days prior written notice to Borrower, except in the event of an
assignment by reason of a merger of Bank. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder, subject to a confidentiality agreement reasonably
acceptable to Bank and Borrower.

SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents constitute the entire agreement between Borrower and Bank with respect
to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. The representations, warranties, and obligations of, and restrictions
upon, Borrower and Danner contained in agreements between or among either or
both of them and Bank that are related to the Credit Agreement or Existing
Security Agreements shall be deemed merged into, and amended and restated in
full by, this Agreement and the New Security Agreements as of the date hereof.
This Agreement may be amended or modified only in writing signed by each party
hereto. This Agreement may be amended or modified only in writing signed by each
party hereto. This Agreement amends and restates in its entirety the Existing
Agreement. All references to a Credit Agreement in any of the other Loan
Documents shall be deemed to mean and refer to this Agreement.

SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered
into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

SECTION 7.7. TIME. Time is of the essence of each and every provision of this
Agreement and each other of the Loan Documents.

SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement.

SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.

SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oregon.

 

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SECTION 7.11. ARBITRATION.

(a) Arbitration. The parties hereto agree, upon demand by any party, to submit
to binding arbitration all claims, disputes and controversies between or among
them (and their respective employees, officers, directors, attorneys, and other
agents), whether in tort, contract or otherwise in any way arising out of or
relating to (i) any credit subject hereto, or any of the Loan Documents, and
their negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement,
default or termination; or (ii) requests for additional credit.

(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location
in Oregon selected by the American Arbitration Association (“AAA”); (ii) be
governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA’s optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to herein, as applicable, as the “Rules”). If
there is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. §91 or any
similar applicable state law.

(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which
the amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Oregon or a neutral retired judge of the state
or federal judiciary of Oregon, in either case with a minimum of ten years
experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Oregon and may grant any
remedy or relief that a court

 

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of such state could order or grant within the scope hereof and such ancillary
relief as is necessary to make effective any award. The arbitrator shall also
have the power to award recovery of all costs and fees, to impose sanctions and
to take such other action as the arbitrator deems necessary to the same extent a
judge could pursuant to the Federal Rules of Civil Procedure, the Oregon Rules
of Civil Procedure or other applicable law. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction. The institution
and maintenance of an action for judicial relief or pursuit of a provisional or
ancillary remedy shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the controversy or claim to arbitration if
any other party contests such action for judicial relief.

(e) Discovery. In any arbitration proceeding, discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date. Any request for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party’s presentation and that no alternative means for
obtaining information is available.

(f) Class Proceedings and Consolidations. No party hereto shall be entitled to
join or consolidate disputes by or against others in any arbitration, except
parties who have executed any Loan Document, or to include in any arbitration
any dispute as a representative or member of a class, or to act in any
arbitration in the interest of the general public or in a private attorney
general capacity.

(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs
and expenses of the arbitration proceeding.

(h) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators
and the parties shall take all action required to conclude any arbitration
proceeding within 180 days of the filing of the dispute with the AAA. No
arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK
CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN
WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE ENFORCEABLE.

 

19

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.

 

LACROSSE FOOTWEAR, INC.       WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Joseph P. Schneider

    By:  

/s/ James R. Bednark

  Joseph P. Schneider, President/       James R. Bednark, Senior Vice President
  Chief Executive Officer       By:  

/s/ David P. Carlson

        David P. Carlson, Executive Vice         President/Chief Financial
Officer      

 

20

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EXHIBIT A

TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

Certain U.S. Registered Trademarks

 

Reg. No.

  

Owner

  

Description of Mark

  

Date Registered

1743247    LaCrosse Footwear, Inc.    LOGO [g27861710_22pg21a.jpg]    12/29/92
1713804    LaCrosse Footwear, Inc.    LACROSSE    9/8/92 1164720    LaCrosse
Footwear, Inc.    LOGO [g27861710_22pg21b.jpg]    8/11/81 3881730    LaCrosse
Footwear, Inc.    LACROSSE    11/23/10 1715913    LaCrosse Footwear, Inc.   
LOGO [g27861710_22pg21c.jpg]    9/15/92 1266401    Danner, Inc.    LOGO
[g27861710_22pg21d.jpg]    2/7/84 3282469    Danner, Inc.    DANNER    8/21/07