Third Party Security Agreement Rights to Payment and Inventory



 Exhibit 10.20 

 

			
		 	THIRD PARTY SECURITY AGREEMENT
	WELLS FARGO 	 	RIGHTS TO PAYMENT AND INVENTORY

  
 1. GRANT OF
SECURITY INTEREST. In consideration of any credit or other financial accommodation heretofore, now or hereafter extended or made to LaCrosse Footwear, Inc. (“Borrower”) by WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”),
and for other valuable consideration, as security for the payment of all Indebtedness of Borrower to Bank, the undersigned Danner, Inc. (“Owner”) hereby grants and transfers to Bank a security interest in all accounts, deposit
accounts, chattel paper (whether electronic or tangible), instruments, promissory notes, documents, general intangibles, payment intangibles, software, letter of credit rights, health-care insurance receivables and other rights to payment
(collectively called “Rights to Payment”), now existing or at any time hereafter, and prior to the termination hereof, arising (whether they arise from the sale, lease or other disposition of inventory or from performance of contracts for
service, manufacture, construction, repair or otherwise or from any other source whatsoever), including all securities, guaranties, warranties, indemnity agreements, insurance policies, supporting obligations and other agreements pertaining to the
same or the property described therein, and in all goods returned by or repossessed from Owner’s customers, together with a security interest in all inventory, goods held for sale or lease or to be furnished under contracts for service, goods
so leased or furnished, raw materials, component parts and embedded software, work in process or materials used or consumed in Owner’s business, and all warehouse receipts, bills of lading and other documents evidencing goods owned or acquired
by Owner, and all goods covered thereby, now or at any time hereafter, and prior to the termination hereof, owned or acquired by Owner, wherever located, and all products thereof (collectively called “Inventory”), whether in the possession
of Owner, warehousemen, bailees or any other person, or in process of delivery, and whether located at Owner’s places of business or elsewhere (with all Rights to Payment and Inventory referred to herein collectively as the
“Collateral”), excluding all Excluded Collateral as defined below, together with whatever is receivable or received when any of the Collateral or proceeds thereof are sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, including without limitation, all rights to payment, including returned premiums, with respect to any insurance relating to any of the foregoing, and all rights to payment with respect to any claim or cause
of action affecting or relating to any of the foregoing (hereinafter called “Proceeds”). As used herein “Excluded Collateral” means (i) all “Intent to Use” applications for trademark or service mark registrations
filed pursuant to Section 1(b) of the Lanham Act, and all goodwill associated therewith and all other assets, rights and interests that uniquely reflect or embody such goodwill (each, a “Lanham Act Application”), unless and until an
Amendment to Allege Use or a Statement of Use under Section 1(c) and 1(d) of said Act has been filed with respect to this Agreement; and (ii) contracts with the United States Government or any political subdivision thereof for which any
necessary consent for the security interest granted hereunder has not been obtained from the United States Government or such subdivision under 31 U.S.C. §3727 and 41 U.S.C. §15, and the regulations in effect thereunder, and accounts
generated under such contracts. The word “Indebtedness” is used herein in its most comprehensive sense and includes any and all advances, debts, obligations and liabilities of Borrower heretofore, now or hereafter made, incurred or
created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, including under any swap, derivative, foreign exchange, hedge, deposit, treasury
management or other similar transaction or arrangement, and whether recovery upon such Indebtedness may be or hereafter becomes unenforceable. 

2. CONTINUING AGREEMENT; REVOCATION; OBLIGATION UNDER OTHER AGREEMENTS. This is a continuing agreement and all rights, powers and remedies hereunder
shall apply to all past, present and future Indebtedness of Borrower to Bank, including that arising under successive transactions which shall either continue the Indebtedness, increase or decrease it, or from time to time create new Indebtedness
after all or any prior Indebtedness has been satisfied, and notwithstanding the death, incapacity, dissolution, liquidation or bankruptcy of Borrower or Owner or any other event or proceeding affecting Borrower or Owner. This Agreement shall not
apply to any new Indebtedness of Borrower to Bank created after actual receipt by Bank of written notice of its revocation as to such new Indebtedness; provided however, that loans or advances made by Bank to Borrower after revocation under
commitments existing prior to receipt by Bank of such revocation, and extensions, renewals or modifications, of any kind, of Indebtedness incurred by Borrower or committed by Bank prior to receipt by Bank of such revocation, shall not be considered
new Indebtedness. Any such notice must be sent to Bank by registered U.S. mail, postage prepaid, addressed to its office at Portland Middle Market-OR, P6101-133 1300 S. W. Fifth Avenue, Portland, OR 97201, or at such other address as Bank
shall from time to time designate. The obligations of Owner hereunder shall be in addition to any obligations of Owner under any other grants or pledges of security for any liabilities or 

  
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obligations of Borrower or any other persons heretofore or hereafter given to Bank unless said other grants or pledges of security are expressly modified or revoked in writing; and this Agreement
shall not, unless expressly herein provided, affect or invalidate any such other grants or pledges of security. 
 3. OBLIGATIONS INDEPENDENT;
SEPARATE ACTIONS; WAIVER OF STATUTE OF LIMITATIONS; REINSTATEMENT OF LIABILITY. The obligations hereunder are independent of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against Owner whether action is
brought against Borrower or any other person, or whether Borrower or any other person is joined in any such action or actions. Owner acknowledges that this Agreement is absolute and unconditional, there are no conditions precedent to the
effectiveness of this Agreement, and this Agreement is in full force and effect and is binding on Owner as of the date written below, regardless of whether Bank obtains collateral or any guaranties from others or takes any other action contemplated
by Owner. Owner waives the benefit of any statute of limitations affecting Owner’s liability hereunder or the enforcement thereof, and Owner agrees that any payment of any Indebtedness or other act which shall toll any statute of limitations
applicable thereto shall similarly operate to toll such statute of limitations applicable to Owner’s liability hereunder. The liability of Owner hereunder shall be reinstated and revived and the rights of Bank shall continue if and to the
extent that for any reason any amount at any time paid on account of any Indebtedness secured hereby is rescinded or must otherwise be restored by Bank, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, all as
though such amount had not been paid. The determination as to whether any amount so paid must be rescinded or restored shall be made by Bank in its sole discretion; provided however, that if Bank chooses to contest any such matter at the request of
Owner, Owner agrees to indemnify and hold Bank harmless from and against all costs and expenses, including reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s in-house counsel), expended or
incurred by Bank in connection therewith, including without limitation, in any litigation with respect thereto. 
 4. OBLIGATIONS OF BANK. Any
money received by Bank in respect of the Collateral may be deposited, at Bank’s option, into a non-interest bearing account over which Owner shall have no control, and the same shall, for all purposes, be deemed Collateral hereunder, subject,
however, to the terms of the Credit Agreement regarding the use of insurance proceeds, and the right of Owner to retain and use proceeds of the sale of inventory in the ordinary course of business when an Event of Default does not exist. 

5. REPRESENTATIONS AND WARRANTIES. 
 5.1 Owner
represents and warrants to Bank that: (a) Owner’s legal name is exactly as set forth on the first page of this Agreement, and all of Owner’s organizational documents or agreements delivered to Bank are complete and accurate in every
respect; (b) Owner is the owner and has possession or control of the Collateral and Proceeds, except security deposits (and interest thereon), goods in transit or that are temporarily in the possession of repairmen, product testing services, or
potential buyers or vendors as samples, or goods in storage in the ordinary course of business; (c) Owner has the exclusive right to grant a security interest in the Collateral and Proceeds; (d) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and conditions precedent of any kind or character, except the lien created hereby, or Permitted Encumbrances, as defined in the Third Amended and Restated Credit Agreement of
even date herewith between Borrower and Bank, as amended, renewed or restated from time to time (the “Credit Agreement”) or as otherwise agreed to by Bank, or heretofore disclosed by Owner to Bank, in writing; (e) all statements
contained herein and, where applicable, in the Collateral are true and complete in all material respects; (f) no financing statement covering any of the Collateral or Proceeds, and naming any secured party other than Bank, is on file in any
public office; and (g) to the extent that Collateral consists of particular rights to payment in excess of $100,000.00, all persons appearing to be obligated on these particular items of Collateral and Proceeds have authority and capacity to
contract and are bound as they appear to be, all property subject to chattel paper has been properly registered and filed in compliance with law and to perfect the interest of Owner in such property, and all such Collateral and Proceeds comply with
all applicable laws concerning form, content and manner of preparation and execution, including where applicable Federal Reserve Regulation Z and any State consumer credit laws. 
 5.2 Owner further represents and warrants to Bank that: (a) the Collateral pledged hereunder is so pledged at Borrower’s request; (b) Bank has made no representation to Owner as to the
creditworthiness of Borrower; and (c) Owner has established adequate means of obtaining from Borrower on a continuing basis financial and other information pertaining to Borrower’s financial condition. Owner agrees to keep adequately
informed from such means of any facts, events or circumstances which might in any way affect Owner’s risks hereunder, and Owner further agrees that Bank shall have no obligation to disclose to Owner any information or material about Borrower
which is acquired by Bank in any manner. 

  
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 6. COVENANTS OF OWNER. 
 6.1 Owner agrees in general: (a) to indemnify Bank against all losses, claims, demands, liabilities and expenses of every kind caused by property subject hereto, except to the extent caused by the
Bank after taking possession or control thereof; (b) to permit Bank to exercise its powers; (c) to execute and deliver such documents as Bank deems necessary to create, perfect and continue the security interests contemplated hereby;
(d) not to change Owner’s name, and as applicable, its chief executive office, its principal residence or the jurisdiction in which it is organized and/or registered without giving Bank prior written notice thereof; (e) not to change
the places where Owner keeps any Collateral (except security deposits (and interest thereon), goods in transit, goods that are temporarily in the possession of repairmen, product testing services, or potential buyers or vendors as samples, or goods
in storage in the ordinary course of business) or Owner’s records concerning the Collateral and Proceeds without giving Bank prior written notice of the address to which Owner is moving same; and (f) to cooperate with Bank in perfecting
all security interests granted herein as required in the Credit Agreement and in obtaining such agreements from third parties as Bank deems necessary, proper or convenient in connection with the preservation, perfection or enforcement of any of its
rights hereunder. 
 6.2 Owner agrees with regard to the Collateral and Proceeds, unless Bank agrees otherwise in writing: (a) that Bank is
authorized to file financing statements in the name of Owner to perfect Bank’s security interest in Collateral and Proceeds; (b) to insure Inventory and, where applicable, Rights to Payment with Bank named as a loss payee as its interest
may appear, in form, substance and amounts, under agreements, against risks and liabilities, and with insurance companies satisfactory to Bank; (c) not to use any Inventory for any unlawful purpose or in any way that would void any insurance
required to be carried in connection therewith; (d) not to remove Inventory (other than goods in transit, goods that are temporarily in the possession of repairmen, product testing services, or potential buyers or vendors as samples, or goods
in storage in the ordinary course of business) from Owner’s premises, except (A) for deliveries to buyers in the ordinary course of Owner’s business, and deliveries of damaged, obsolete, surplus or worn-out property, and
(B) Collateral which consists of mobile goods as defined in the Oregon Uniform Commercial Code, in which case Owner agrees not to remove or permit the removal of such Collateral from its state of domicile for a period in excess of thirty
(30) calendar days; (e) not to permit any security interest in or lien on the Collateral or Proceeds, including without limitation, liens arising from the storage of Inventory, except in favor of Bank or as set forth in the Credit
Agreement or Permitted Encumbrances; (f) not to sell, hypothecate or otherwise dispose of, nor permit the transfer by operation of law of, any of the Collateral or Proceeds or any interest therein, except sales of Inventory to buyers in the
ordinary course of Owner’s business, sales of damaged obsolete surplus, or worn-out property, or as otherwise permitted herein or in the Credit Agreement; (g) to furnish reports to Bank of all acquisitions, returns, sales and other
dispositions of the Inventory in such form and detail and at such times as Bank may require; (h) to permit Bank to inspect the Collateral at any time; (i) to keep, in accordance with generally accepted accounting principles, complete and
accurate records regarding all Collateral and Proceeds, and to permit Bank to inspect the same and make copies thereof at any reasonable time; (j) if requested by Bank during the continuance of an Event of Default, to receive and use reasonable
diligence to collect Rights to Payment and Proceeds, in trust and as the property of Bank, and to immediately endorse as appropriate and deliver such Rights to Payment and Proceeds to Bank daily in the exact form in which they are received together
with a collection report in form satisfactory to Bank; (k) not to commingle Rights to Payment, Proceeds or collections thereunder with other property; (l) to give only normal allowances and credits and to advise Bank thereof immediately in
writing if they affect any Rights to Payment or Proceeds in any material respect; (m) on demand, to deliver to Bank returned property resulting from, or payment equal to, such allowances or credits on any Rights to Payment or Proceeds or to
execute such documents and do such other things as Bank may reasonably request for the purpose of perfecting, preserving and enforcing its security interest in such returned property; (n) from time to time, when requested by Bank, to prepare
and deliver a schedule of all Collateral and Proceeds subject to this Agreement and to assign in writing and deliver to Bank all accounts, contracts, leases and other chattel paper, instruments, documents and other evidences thereof; (o) in the
event Bank elects to receive payments of Rights to Payment or Proceeds hereunder during the continuance of an Event of Default, to pay all expenses incurred by Bank in connection therewith, including expenses of accounting, correspondence,
collection efforts, reporting to account or contract debtors, filing, recording, record keeping and expenses incidental thereto; and (p) to provide any service and do any other acts which may be necessary to maintain, preserve and protect all
Collateral and, as appropriate and applicable, to keep all Collateral in good and saleable condition in accordance with the standards and practices adhered to generally by users and manufacturers of like property, including with respect to defective
and returned products (which may be repaired or disposed of in any lawful manner), and to keep all Collateral and Proceeds free and clear of all defenses, rights of offset and counterclaims, subject to offsets in the ordinary course of business for
defective inventory. 

  
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 7. POWERS OF BANK. Owner appoints Bank its true attorney-in-fact to perform any of the following powers,
which are coupled with an interest, are irrevocable until termination of this Agreement and may be exercised from time to time by Bank’s officers and employees, or any of them, if Borrower or Owner is in default: (a) to perform any
obligation of Owner hereunder in Owner’s name or otherwise; (b) to give notice to account debtors or others of Bank’s rights in the Collateral and Proceeds, to enforce or forebear from enforcing the same and make extension or
modification agreements with respect thereto; (c) to release persons liable on Collateral or Proceeds and to give receipts and acquittances and compromise disputes in connection therewith; (d) to release or substitute security; (e) to
resort to security in any order; (f) to prepare, execute, file, record or deliver notes, assignments, schedules, designation statements, financing statements, continuation statements, termination statements, statements of assignment,
applications for registration or like papers to perfect, preserve or release Bank’s interest in the Collateral and Proceeds; (g) to receive, open and read mail addressed to Owner, and promptly deliver the originals thereof (or, if the mail
consists of Collateral or Proceeds, copies) to Owner; (h) to take cash, instruments for the payment of money and other property to which Bank is entitled; (i) to verify facts concerning the Collateral and Proceeds by inquiry of obligors
thereon, or otherwise, in its own name or a fictitious name; (j) to endorse, collect, deliver and receive payment under instruments for the payment of money constituting or relating to Proceeds; (k) to prepare, adjust, execute, deliver and
receive payment under insurance claims, and to collect and receive payment of and endorse any instrument in payment of loss or returned premiums or any other insurance refund or return, and to apply such amounts received by Bank, at Bank’s sole
option, toward repayment of the Indebtedness secured hereby or replacement of the Collateral; (l) to exercise all rights, powers and remedies which Owner would have, but for this Agreement, with respect to all Collateral and Proceeds subject
hereto; (m) to enter onto Owner’s premises in inspecting the Collateral; (n) to make withdrawals from and to close deposit accounts or other accounts with any financial institution, wherever located, into which Proceeds may have been
deposited, and to apply funds so withdrawn to payment of the Indebtedness secured hereby; (o) to preserve or release the interest evidenced by chattel paper to which Bank is entitled hereunder and to endorse and deliver any evidence of title
incidental thereto; and (p) to do all acts and things and execute all documents in the name of Owner or otherwise, deemed by Bank as necessary, proper and convenient in connection with the preservation, perfection or enforcement of its rights
hereunder. 
 8. OWNER’S WAIVERS. 

8.1 Owner waives any right to require Bank to: (a) proceed against Borrower or any other person; (b) marshal assets or proceed against or
exhaust any security held from Borrower or any other person; (c) give notice of the terms, time and place of any public or private sale or other disposition of personal property security held from Borrower or any other person; (d) take any
other action or pursue any other remedy in Bank’s power; or (e) make any presentment or demand for performance, or give any notice of nonperformance, protest, notice of protest or notice of dishonor hereunder or in connection with any
obligations or evidences of indebtedness held by Bank as security for or which constitute in whole or in part the Indebtedness secured hereunder, or in connection with the creation of new or additional Indebtedness. 

8.2 Owner waives any defense to its obligations hereunder based upon or arising by reason of: (a) any disability or other defense of Borrower or any
other person; (b) the cessation or limitation from any cause whatsoever, other than payment in full, of the Indebtedness of Borrower or any other person; (c) any lack of authority of any officer, director, partner, agent or any other
person acting or purporting to act on behalf of Borrower which is a corporation, partnership or other type of entity, or any defect in the formation of Borrower; (d) the application by Borrower of the proceeds of any Indebtedness for purposes
other than the purposes represented by Borrower to, or intended or understood by, Bank or Owner; (e) any act or omission by Bank which directly or indirectly results in or aids the discharge of Borrower or any portion of the Indebtedness
secured hereby by operation of law or otherwise, or which in any way impairs or suspends any rights or remedies of Bank against Borrower in the absence of Bank’s gross negligence, willful misconduct or bad faith; (f) any impairment of the
value of any interest in any security for the Indebtedness or any portion thereof, including without limitation, the failure to obtain or maintain perfection or recordation of any interest in any such security, the release of any such security
without substitution, and/or the failure to preserve the value of, or to comply with applicable law in disposing of, any such security; (g) any modification of the Indebtedness secured hereby, in any form whatsoever, including any modification
made after revocation hereof to such Indebtedness incurred prior to such revocation, and including without limitation the renewal, extension, acceleration or other change in time for payment of, or other change in the terms of, the


  
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Indebtedness or any portion thereof, including increase or decrease of the rate of interest thereon; or (h) any requirement that Bank give any notice of acceptance of this Agreement. Until
all Indebtedness secured hereby shall have been paid in full, Owner shall have no right of subrogation, and Owner waives any right to enforce any remedy which Bank now has or may hereafter have against Borrower or any other person, and waives any
benefit of, or any right to participate in, any security now or hereafter held by Bank. Owner further waives all rights and defenses Owner may have arising out of (i) any election of remedies by Bank, even though that election of remedies, such
as a non-judicial foreclosure with respect to any security for any portion of the Indebtedness secured hereby, destroys Owner’s rights of subrogation or Owner’s rights to proceed against Borrower for reimbursement, or (ii) any loss of
rights Owner may suffer by reason of any rights, powers or remedies of Borrower in connection with any anti-deficiency laws or any other laws limiting, qualifying or discharging Borrower’s Indebtedness, whether by operation of law or otherwise,
including any rights Owner may have to a fair market value hearing to determine the size of a deficiency following any foreclosure sale or other disposition of any real property security for any portion of the Indebtedness secured hereby.

 9. AUTHORIZATIONS TO BANK. Owner authorizes Bank either before or after revocation hereof, without notice to or demand on Owner, and without
affecting Owner’s liability hereunder, from time to time to: (a) alter, compromise, renew, extend, accelerate or otherwise change the time for payment of, or otherwise change the terms of, the Indebtedness secured hereby or any portion
thereof, including increase or decrease of the rate of interest thereon; (b) take and hold security, other than the Collateral and Proceeds, for the payment of the Indebtedness secured hereby or any portion thereof, and exchange, enforce,
waive, subordinate or release the Collateral and Proceeds, or any part thereof, or any such other security; (c) apply the Collateral and Proceeds or such other security and direct the order or manner of sale thereof, including without
limitation, a non-judicial sale permitted by the terms of the controlling security agreement, mortgage or deed of trust, as Bank in its discretion may determine; (d) release or substitute any one or more of the endorsers or guarantors of the
Indebtedness secured hereby, or any portion thereof, or any other party thereto; and (e) apply payments received by Bank from Borrower to any Indebtedness of Borrower to Bank, in such order as Bank shall determine in its sole discretion,
whether or not such Indebtedness is covered by this Agreement, and Owner hereby waives any provision of law regarding application of payments which specifies otherwise. Bank may without notice assign this Agreement in whole or in part. 

10. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Owner agrees to pay or secure by bond (or contest in good faith, provided adequate
reserves are made therefor and no enforcement proceedings against any Collateral has been instituted that are not stayed or dismissed within sixty days thereafter), prior to delinquency, all insurance premiums, taxes, charges, liens and assessments
against the Collateral and Proceeds, and upon the failure of Owner to do so, Bank at its option may pay any of them and shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same. Any such payments
made by Bank shall be obligations of Owner to Bank, due and payable immediately upon demand, together with interest at the rate set forth in Section 17 of this Agreement, and shall be secured by the Collateral and Proceeds, subject to all terms
and conditions of this Agreement. 
 11. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute an “Event of
Default” under this Agreement: (a) any Event of Default under the Credit Agreement; (b) any default in the payment or performance of any obligation, or any defined event of default, under (i) any contract or instrument evidencing
any Indebtedness secured hereby, or (ii) any other agreement between Borrower and Bank, including without limitation any loan agreement, relating to or executed in connection with any Indebtedness secured hereby; (c) any representation or
warranty made by Owner herein shall prove to be incorrect, false or misleading in any material respect when made; (d) Owner shall fail to observe or perform any obligation or agreement contained herein; (e) any material impairment of the
rights of Bank in any Collateral or Proceeds or any attachment or like levy on any property of Owner; and (f) Bank, in good faith, believes that $2,000,000.00 or more of any or all of the Collateral and/or Proceeds to be in danger of misuse,
dissipation, commingling, loss, theft, damage or destruction, or otherwise in jeopardy or unsatisfactory in character or value. As used in this Section 11, “material impairment” means having an adverse effect of at least
$2,000,000.00. 
 12. REMEDIES. Upon the occurrence of any Event of Default, Bank shall have and may exercise without demand any and all rights,
powers, privileges and remedies granted to a secured party upon default under the Oregon Uniform Commercial Code or otherwise provided by law, including without limitation, the right (a) to contact all persons obligated to Owner on any
Collateral or Proceeds and to instruct such persons to deliver all Collateral and/or Proceeds directly to Bank, and (b) to sell, lease, license or otherwise dispose of any or all Collateral. All rights, powers, privileges and remedies of Bank
shall be cumulative. No delay, failure or discontinuance of Bank in 

  
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exercising any right, power, privilege or remedy hereunder shall affect or operate as a waiver of such right, power, privilege or remedy; nor shall any single or partial exercise of any such
right, power, privilege or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power, privilege or remedy. Any waiver, permit, consent or approval of any kind by Bank of any default
hereunder, or any such waiver of any provisions or conditions hereof, must be in writing and shall be effective only to the extent set forth in writing. It is agreed that public or private sales or other dispositions, for cash or on credit, to a
wholesaler or retailer or investor, or user of property of the types subject to this Agreement, or public auctions, are all commercially reasonable since differences in the prices generally realized in the different kinds of dispositions are
ordinarily offset by the differences in the costs and credit risks of such dispositions. 
 While an Event of Default exists: (a) Owner
will deliver to Bank from time to time, as requested by Bank, current lists of all Collateral and Proceeds; (b) Owner will not dispose of any Collateral or Proceeds except on terms approved by Bank or that fulfill contracts of sale previously
entered into in the ordinary course of business; (c) at Bank’s request, Owner will assemble and deliver all Collateral and Proceeds, and books and records pertaining thereto, to Bank at a reasonably convenient place designated by Bank; and
(d) Bank may, without notice to Owner, enter onto Owner’s premises and take possession of the Collateral. With respect to any sale by Bank of any Collateral subject to this Agreement, Owner hereby expressly grants to Bank the right to sell
such Collateral using any or all of Owner’s trademarks, trade names, trade name rights and/or proprietary labels or marks. Owner further agrees that Bank shall have no obligation to process or prepare any Collateral for sale or other
disposition. 
 13. DISPOSITION OF COLLATERAL AND PROCEEDS; TRANSFER OF INDEBTEDNESS. In disposing of Collateral hereunder, Bank may disclaim
all warranties of title, possession, quiet enjoyment and the like. Any proceeds of any disposition of any Collateral or Proceeds, or any part thereof, may be applied by Bank to the payment of expenses incurred by Bank in connection with the
foregoing, including reasonable attorneys’ fees, and the balance of such proceeds may be applied by Bank toward the payment of the Indebtedness secured hereby in such order of application as Bank may from time to time elect. Upon the transfer
of all or any part of the Indebtedness secured hereby, Bank may transfer all or any part of the Collateral or Proceeds and shall be fully discharged thereafter from all liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of Bank hereunder with respect to any of the foregoing so transferred; but with respect to any Collateral or Proceeds not so transferred, Bank shall retain all rights,
powers, privileges and remedies herein given. 
 14. STATUTE OF LIMITATIONS. Until all Indebtedness secured hereby shall have been paid in full
and all commitments by Bank to extend credit to Borrower have been terminated, the power of sale or other disposition and all other rights, powers, privileges and remedies granted to Bank hereunder shall continue to exist and may be exercised by
Bank at any time and from time to time irrespective of the fact that the Indebtedness or any part thereof may have become barred by any statute of limitations, or that the personal liability of Borrower may have ceased, unless such liability shall
have ceased due to the payment in full of all Indebtedness secured hereunder. 
 15. MISCELLANEOUS. Owner hereby waives any right to require
Bank to (i) proceed against Borrower or any other person, (ii) marshal assets or proceed against or exhaust any security from Borrower, Owner or any other person, (iii) perform any obligation of Owner with respect to any Collateral or
Proceeds, and (d) make any presentment or demand, or give any notice of nonpayment or nonperformance, protest, notice of protest or notice of dishonor hereunder or in connection with any Collateral or Proceeds. After the occurrence and during
the existence of any Event of Default, Owner further waives any right to direct the application of payments or security for any Indebtedness of Borrower, Owner or indebtedness of customers of Owner. 

16. NOTICES. All notices, requests and demands required under this Agreement must be in writing, addressed to Bank at the address specified in
Section 2 hereof and to Owner at the address of its chief executive office (or principal residence, if applicable) specified below or to such other address as any party may designate by written notice to each other party, and shall be deemed to
have been given or made as follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or 3 days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by
telecopy, upon receipt. 
 17. COSTS, EXPENSES AND ATTORNEYS’ FEES. Owner shall pay to Bank 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 Bank’s in-house counsel), expended or incurred by Bank in connection with (a) the
perfection and preservation of the Collateral or Bank’s interest therein, and (b) the realization, 

  
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enforcement and exercise of any right, power, privilege or remedy conferred by this Agreement, whether 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 Owner or in any way affecting
any of the Collateral or Bank’s ability to exercise any of its rights or remedies with respect thereto. All of the foregoing shall be paid by Debtor with interest from the date of demand until paid in full at a rate per annum equal to the
greater of ten percent (10%) or Bank’s Prime Rate in effect from time to time. 
 18. 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 Owner may not assign or transfer any of its interests or rights hereunder without
Bank’s prior written consent. Owner acknowledges that Bank has the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, any Indebtedness of Borrower to Bank and any obligations with
respect thereto, including this Agreement. In connection therewith, Bank may disclose all documents and information which Bank now has or hereafter acquires relating to Owner and/or this Agreement, whether furnished by Borrower, Owner or otherwise.
Owner further agrees that Bank may disclose such documents and information to Borrower. 
 19. AMENDMENT. This Agreement may be amended or
modified only in writing signed by Bank and Owner. 
 20. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be held to 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. 

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

22. ARBITRATION. 
 22.1 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 this Agreement and its negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or
termination. 
 22.2 Governing Rules. Any arbitration proceeding will (a) proceed in a location in Oregon selected by the American
Arbitration Association (“AAA”); (b) 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 (c) 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. 
 22.3 No
Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (a) foreclose against real or personal property collateral; (b) exercise self-help remedies relating to
collateral or proceeds of collateral such as setoff or repossession; or (c) 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
(a), (b) and (c) of this paragraph. 
 22.4 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 

  
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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 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. 
 22.5 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 requests 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.

 22.6 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 this Agreement or any other contract, instrument or document relating to any Indebtedness secured hereby, 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. 
 22.7 Payment Of Arbitration Costs
And Fees. The arbitrator shall award all costs and expenses of the arbitration proceeding. 
 22.8 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, by applicable law or regulation, or to the extent necessary to exercise any judicial review
rights set forth herein. 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 documents between the parties or the subject matter of the dispute
shall control. This arbitration provision shall survive termination, amendment or expiration of any of the documents or any relationship between the parties. 
 23. DEFINED TERMS. Terms used in this Agreement which are defined in the Credit Agreement or the Line of Credit Note shall have the same meaning herein that they are given therein. 

Owner warrants that Owner is an organization registered under the laws of Wisconsin. 
 Owner warrants that its chief executive office (or principal residence, if applicable) is located at the following address: 17634 NE Airport Way, Portland, OR 97230 

Owner warrants that the Collateral (except goods in transit) is located or domiciled at the following additional addresses:
12021 NE Airport Way, Suite B, Portland OR 97220; 18201 NE Portal Way, Portland, OR 97230; 5312 NE 148th Avenue, Portland, OR 97230-3438; 5352 Performance Way, Whitestown, IN 46075; and 17634 NE Airport Way, Portland, OR 97230 and such other addresses of which the Owner notifies the Bank from time to time.
Owner sells inventory in the ordinary course of business to LaCrosse Denmark, which stores it at Niels Ebbesens Vej 19 DK-1911 Frederiksberg, Denmark or at Scan Global Logistics, True Mollevej 1,8381 Tilst, Denmark, or in transit, and which ships
inventory under customary sale and shipping terms to its customers, and to vendors as samples, and which disposes of defective or out of date inventory in the ordinary course of business. 

  
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 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.  

IN WITNESS WHEREOF, this Agreement has been duly executed as of December 22, 2011. 

 

			
	Danner, Inc.
		
	By:	 	 /s/ David P. Carlson

		 	David P. Carlson, Executive Vice President/Chief Financial Officer
		
	By:	 	 /s/ Joseph P. Schneider

		 	Joseph P. Schneider, President/Chief Executive Officer


  
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