Exhibit 10.116


 


LIMITED CONSENT AGREEMENT


 


This LIMITED CONSENT AGREEMENT (this
“Consent”) is dated as of January 27,
2009 and is entered into by and among BANK OF AMERICA, N.A., as lender (the “Lender”), with offices at 55 South Lake Avenue, Suite 900, Pasadena,
California 91101, and MEADE INSTRUMENTS CORP., a Delaware corporation (“Meade”), SIMMONS OUTDOOR CORPORATION, a Delaware corporation (“Simmons”), and CORONADO INSTRUMENTS, INC., a California corporation (“Coronado” and together with Meade and Simmons, the “Borrowers” and each individually “Borrower”).


 


WHEREAS,
the Lender and the Borrowers have entered into that certain Amended and
Restated Credit Agreement dated as of October 25, 2002 (as amended,
restated or modified from time to time, the “Credit Agreement”);


 


WHEREAS,
the Borrowers have informed the Lender that Meade’s Subsidiary, Meade
Instruments Europe Corp., a California corporation (“MIEC”),
intends to sell all of its interest in Meade Instruments Europe GmbH &
Co. KG, a German limited partnership (“Meade Europe”),
in a transaction (the “Meade Europe Transaction”)
pursuant to a Purchase Agreement of Shares of a German Limited Partnership
between Meade, MIEC, Meade Europe, Bresser GmbH, and Helmut Ebbert (the “Purchase Agreement”);


 


WHEREAS,
the Borrowers have informed the Lender that they are in violation of the
Minimum EBITDA covenant set forth in Section 7.22 of the Credit
Agreement as of November 30, 2008 (the “Existing
Default”), which Existing Default constitutes an Event of Default
under the Credit Agreement and gives rise to certain default rights and
remedies that are available to the Lender in accordance with the Credit
Agreement, the other Loan Documents, and applicable law;


 


WHEREAS,
the Lender has reserved the right, in connection with the Existing Default, to
exercise one or more of its default rights, remedies, and powers under the
Credit Agreement and the other Loan Documents, at law or otherwise at any time
without further notice or demand and has informed the Borrowers that the continued
funding of any loans or the issuance of any Letters of Credit by the Lender is
without prejudice to, and will not constitute a waiver of, the Lender’s default
rights and remedies; and


 


WHEREAS,
notwithstanding the occurrence and continuance of the Existing Default, the
Borrowers have requested that the Lender consent to the Meade Europe
Transaction and the Lender has agreed to such consent pursuant to the terms and
conditions set forth herein; provided that nothing in this Consent, nor any
failure, at any time or times, to exercise, nor any delay in exercising, any of
the Lender’s default rights and remedies shall waive, affect, or diminish any
right of the Lender.


 


NOW,
THEREFORE, in consideration of the mutual conditions and agreements set forth in
the Credit Agreement and this Consent, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:


 


ARTICLE I


 


DEFINITIONS


 


Section 1.01.                             Definitions.  Initially capitalized terms
used but not defined in this Consent have the respective meanings set forth in
the Credit Agreement, as amended hereby.


 





















 


ARTICLE II


 


LIMITED CONSENT


 


Section 2.01.                             Limited Consent. 
Notwithstanding anything contrary in the Credit Agreement or any other
provision set forth in the Loan Documents, and subject to the terms,
conditions, and other restrictions set forth herein, the Lender hereby consents
to the Meade Europe Transaction.  This
consent is limited to the Meade Europe Transaction and is not a consent to any
other transaction, whether or not similar to the foregoing.  The consent to the Meade Europe Transaction is
conditioned upon satisfaction of each of the following conditions precedent thereto,
as well as the conditions precedent set forth in Article IV below:


 


(i)                                     The Borrowers shall have delivered to the
Lender an executed copy of the Purchase Agreement together with true and
correct copies of all exhibits and schedules thereto and all agreements
executed or delivered in connection therewith, all of which must be in form and
substance satisfactory to the Lender in its sole discretion;


 


(ii)                                  Except for the Existing Default, no Default
or Event of Default shall have occurred and be continuing or result from the
consummation of the Meade Europe Transaction; and


 


(iii)                               100% of the cash proceeds of the Meade Europe
Transaction to be received by MIEC shall be paid directly to Meade’s account
no. 1458927067 maintained with the Lender to be applied first
to the Obligations in accordance with the Credit Agreement, second as payment to the Lender in the amount of $750,000 to
be held as cash collateral (as more particularly described below), and third to be disbursed to the Borrowers for ordinary working
capital purposes.


 


Upon satisfaction of the foregoing conditions with respect to the Meade
Europe Transaction (or concurrently therewith), and upon the Borrowers’
request, the Lender will execute and deliver such lien releases (including
UCC-3 financing statement amendments) as may be necessary to effectively
terminate any and all of the Lender’s Liens on the property to be sold pursuant
to the Meade Europe Transaction, all at the Borrowers’ sole cost and expense.


 


ARTICLE III


 


IC LETTER OF CREDIT


 


Section 3.01.                             IC Letter of Credit.  The
Borrowers have requested that the Lender issue a Letter of Credit in the face
amount of $700,000 for the benefit of The Irvine Company (the “IC Letter of Credit”). 
The Borrowers have been informed by the Lender and hereby acknowledge
that the face amount of the requested IC Letter of Credit would exceed
Availability.  Notwithstanding the lack
of Availability, but subject to all other terms and conditions set forth in the
Credit Agreement with respect to the issuance of Letters of Credit, the Lender hereby
agrees to issue the IC Letter of Credit following receipt of the Cash
Collateral (as defined below).


 


Section 3.02.                             Cash Collateral.  As security for the Borrowers’ obligations
relating to the IC Letter of Credit,
the Borrowers hereby pledge and assign, and grant to the Lender a continuing
security interest in cash collateral in the amount of $750,000 (including all
investments, earnings, increases and proceeds thereof, the “Cash Collateral”) to be received by the Lender as described
in Section 2.01(iii) above. 
The Cash Collateral shall be held by the Lender in a non-interest
bearing account in the Lender’s name or in such other manner as the Lender
shall elect.  The Lender shall have no
obligation to invest the


 


2





















 


Cash Collateral.  The Borrowers shall not have any control
whatsoever over the Cash Collateral. 
Beyond the exercise of reasonable care to assure the safe custody of the
Cash Collateral in the physical possession of the Lender, the Lender shall not
have any duty or liability to protect or preserve the Cash Collateral, and
shall be relieved of all responsibility for the Cash Collateral upon
surrendering it to the Borrowers.  The
Lender may apply the Cash Collateral to any amounts payable by the Borrowers
from time to time with respect to the Obligations.


 


Section 3.03.                             Availability. 
Notwithstanding anything to the contrary contained in this Consent or
the Credit Agreement, the IC Letter of Credit will not be included in the
calculation of Availability.


 


ARTICLE IV


 


CONDITIONS PRECEDENT


 


Section 4.01.                             Conditions Precedent.  This
Consent shall not be binding upon the Lender until each of the following
conditions precedent have been satisfied in form and substance satisfactory to
the Lender:


 


(i)                                     The representations and warranties contained
herein and in the Credit Agreement, as amended hereby, shall be true and
correct in all material respects as of the date hereof as if made on the date
hereof, except for such representations and warranties limited by their terms
to a specific date;


 


(ii)                                  The Borrowers shall have delivered to the
Lender an executed original copy of this Consent;


 


(iii)                               The Borrowers shall have delivered to the
Lender executed original copies of each of the Consents and Reaffirmations
attached to this Consent;


 


(iv)                              The Borrowers shall have paid to the Lender
all fees, costs, and expenses owed to and/or incurred by the Lender in
connection with this Consent;


 


(v)                                 Except for the Existing Default, no Default
or Event of Default shall have occurred and be continuing; and


 


(vi)                              All proceedings taken in connection with the
transactions contemplated by this Consent and all documentation and other legal
matters incident thereto shall be satisfactory to the Lender in its sole and
absolute discretion.


 


3





















 


ARTICLE V


 


MISCELLANEOUS


 


Section 5.01.                             Acknowledgment.  Each
Borrower hereby represents and warrants that the execution and delivery of this
Consent and compliance by such Borrower with all of the provisions of this Consent:  (a) are within its powers and purposes; (b) have
been duly authorized or approved by such Borrower; and (c) when executed
and delivered by or on behalf of such Borrower, will constitute valid and
binding obligations of such Borrower, enforceable in accordance with their
terms.  Each Borrower reaffirms its
obligation to pay all amounts due the Lender under the Loan Documents in
accordance with the terms thereof, as modified hereby.


 


Section 5.02.                             Loan Documents Unmodified.  Except
as otherwise specifically modified by this Consent, all terms and provisions of
the Credit Agreement and all other Loan Documents, as modified hereby, shall
remain in full force and effect.  Nothing
contained in this Consent shall in any way impair the validity or
enforceability of the Loan Documents, as modified hereby or alter, waive,
annul, vary, affect, or impair any provisions, conditions, or covenants
contained therein or any rights, powers, or remedies granted therein.  Any lien and/or security interest granted to
the Lender in the Collateral set forth in the Credit Agreement or any other
Loan Document is and shall remain unchanged and in full force and effect and
the Credit Agreement and the other Loan Documents shall continue to secure the
payment and performance of all of the Obligations thereunder, as modified
hereby, and the Borrowers’ obligations hereunder.


 


Section 5.03.                             Parties, Successors and Assigns.  This
Consent shall be binding upon and shall inure to the benefit of each of the Borrowers,
the Lender, and their respective successors and assigns.


 


Section 5.04.                             Counterparts.  This
Consent may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which, when taken together
shall constitute one and the same instrument. 
A facsimile signature shall be deemed effective as an original.


 


Section 5.05.                             Headings.  The headings, captions and
arrangements used in this Consent are for convenience only and shall not affect
the interpretation of this Consent.


 


Section 5.06.                             Expenses of the Lender.  The Borrowers
agree to pay on demand (a) all reasonable costs and expenses incurred by
the Lender in connection with the preparation, negotiation and execution of
this Consent and the other Loan Documents executed pursuant hereto and any and
all subsequent amendments, modifications, and supplements hereto or thereto,
including, without limitation, the costs and fees of the Lender’s legal counsel
and the allocated cost of staff counsel, and (b) all costs and expenses
reasonably incurred by the Lender in connection with the enforcement or
preservation of any rights under the Credit Agreement, this Consent and/or
other Loan Documents, including, without limitation, the reasonable costs and
fees of the Lender’s legal counsel and the allocated cost of staff counsel.


 


Section 5.07.                             Total Agreement.  This
Consent, the Credit Agreement, and all other Loan Documents shall constitute
the entire agreement between the parties relating to the subject matter hereof,
and shall rescind all prior agreements and understandings between the parties
hereto relating to the subject matter hereof, and shall not be changed or
terminated orally.


 


Section 5.08.                             WAIVER OF JURY TRIAL.  TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, EACH BORROWER AND THE LENDER
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS 


 


4





















 


CONSENT, THE CREDIT AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY LENDER-RELATED PERSON OR PARTICIPANT, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  WITHOUT LIMITING THE APPLICABILITY OF ANY
OTHER PROVISION OF THE CREDIT AGREEMENT, THE TERMS OF SECTION 12.3
OF THE CREDIT AGREEMENT SHALL APPLY TO THIS CONSENT.


 


Section 5.09.                             RELEASE.  THE BORROWERS EACH HEREBY
REPRESENT AND WARRANT THAT AS OF THE DATE OF THIS CONSENT THERE ARE NO CLAIMS
OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO THE BORROWERS’ OBLIGATIONS
UNDER THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT, INCLUDING THIS CONSENT.  THE BORROWERS WAIVE AND RELEASE ANY AND ALL
SUCH CLAIMS, OFFSETS, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN,
ARISING PRIOR TO THE DATE OF THIS CONSENT.


 


THE BORROWERS INTEND THE ABOVE RELEASE TO
COVER, ENCOMPASS, RELEASE, AND EXTINGUISH, INTER ALIA, ALL
CLAIMS, DEMANDS, AND CAUSES OF ACTION THAT MIGHT OTHERWISE BE RESERVED BY THE
CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:


 


“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.”


 


THE BORROWERS ACKNOWLEDGE THAT THEY MAY HEREAFTER
DISCOVER FACTS DIFFERENT FROM OR IN ADDITION TO THOSE NOW KNOWN OR BELIEVED TO
BE TRUE WITH RESPECT TO SUCH CLAIMS, DEMANDS, OR CAUSES OF ACTION, AND AGREE
THAT THIS CONSENT AND THE ABOVE RELEASE ARE AND WILL REMAIN EFFECTIVE IN ALL
RESPECTS NOTWITHSTANDING ANY SUCH DIFFERENCES OR ADDITIONAL FACTS.


 


[Signature Pages Follow]


 


5

















 


IN WITNESS WHEREOF, the parties have executed
and delivered this Consent as of the day and year first above written.


 


 


	
   

  	
  “BORROWERS”:

  
	
   

  	
   

  
	
   

  	
  MEADE INSTRUMENTS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SIMMONS OUTDOOR CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CORONADO INSTRUMENTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “LENDER”:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Robert M. Dalton

  
	
   

  	
  Name:

  	
  Robert
  M. Dalton

  
	
   

  	
  Title:

  	
  Vice President

  



 


 


Signature Page


 





















 


CONSENTS AND REAFFIRMATIONS


 


Each of MEADE INSTRUMENTS EUROPE CORP., a California corporation, and MEADE
INSTRUMENTS HOLDINGS CORP., a California corporation, hereby acknowledges the
execution of, and consents to, the terms and conditions of that certain Limited
Consent Agreement dated as of January 27, 2009, among MEADE INSTRUMENTS
CORP., SIMMONS OUTDOOR CORP., CORONADO INSTRUMENTS, INC. and BANK OF AMERICA,
N.A. (the “Creditor”), and reaffirms its obligations
under (a) that certain Continuing Guaranty (the “Guaranty”)
dated as of September 24, 2001, made by the undersigned in favor of the
Creditor, and (b) that certain Security Agreement (the “Security Agreement”) dated as of September, 2001, by and
between the undersigned and the Creditor.  Each of the undersigned acknowledges and
agrees that each of the Guaranty and the Security Agreement remain in full
force and effect and are hereby ratified and confirmed.


 


 


Dated
as of January 27, 2009.


 


 


	
   

  	
  MEADE
  INSTRUMENTS EUROPE CORP.,

  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEADE
  INSTRUMENTS HOLDINGS CORP.,

  a California
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer

  



 





















 


CONSENTS AND REAFFIRMATIONS


 


Each of MTSC HOLDINGS, INC., a California corporation (“MTSC”), MC HOLDINGS, INC., a California corporation (“MC HOLDINGS”), and MEADE CORONADO HOLDINGS CORP., a California
corporation (“MCHC”), hereby acknowledges the
execution of, and consents to, the terms and conditions of that certain Limited
Consent Agreement dated as of January 27, 2009, among MEADE INSTRUMENTS CORP.,
SIMMONS OUTDOOR CORP., CORONADO INSTRUMENTS, INC. and BANK OF AMERICA, N.A. (“Creditor”), and reaffirms its obligations under that certain
Continuing Guaranty (the “Guaranty”)
dated as of September 24, 2001 executed in favor of the Creditor and
joined by each of the undersigned pursuant to an Instrument of Joinder, dated
as of (i) October 25, 2002 with respect to MTSC and MC HOLDINGS, and (ii) December 1,
2004 with respect to MCHC (respectively, the “Instrument”).  Each of the undersigned acknowledges and
agrees that each of the Guaranty and Instrument remain in full force and effect
and are hereby ratified and confirmed.


 


 


Dated
as of January 27, 2009.


 


 


	
   

  	
  MTSC
  HOLDINGS, INC.,

  a California
  corporation,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MC
  HOLDINGS, INC.,

  a California
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEADE
  CORONADO HOLDINGS CORP.,

  a California
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  Name:

  	
  Paul E. Ross

  
	
   

  	
  Title:

  	
  Senior Vice President –
  Finance & Chief Financial Officer