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FOURTH AMENDMENT TO
THIRD AMENDED
AND RESTATED
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
BY AND BETWEEN
GANDER MOUNTAIN, INC.,
as Borrower
AND
BANK ONE, MILWAUKEE, NA
FIRSTAR BANK MILWAUKEE, N.A.
LASALLE NATIONAL BANK,
NBD BANK (formerly known as NBD BANK, N.A.), and
HARRIS TRUST AND SAVINGS BANK
as Banks
AND
BANK ONE, MILWAUKEE, NA,
as Agent
January 23, 1996
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EXHIBIT 10.12
FOURTH AMENDMENT TO
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AND
TERM LOAN AGREEMENT
THIS FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT (this "Fourth Amendment") is made as of the 23rd day of
January, 1996, by and between BANK ONE, MILWAUKEE, NA, as Bank and agent for
the Banks, FIRSTAR BANK MILWAUKEE, N.A., LASALLE NATIONAL BANK, NBD BANK,
formerly known as NBD BANK, N.A. and HARRIS TRUST AND SAVINGS BANK, as Banks,
and GANDER MOUNTAIN, INC., a Wisconsin corporation, as Borrower.
R E C I T A L S
WHEREAS, pursuant to a Third Amended and Restated Revolving Credit and
Term Loan Agreement dated as of November 22, 1994 and amended by First
Amendment to Third Amended and Restated Revolving Credit and Term Loan
Agreement dated August 18, 1995, Second Amendment (the "Second Amendment") to
Third Amended and Restated Revolving Credit and Term Loan Agreement dated
November 17, 1995 and Third Amendment (the "Third Amendment") to Third Amended
and Restated Revolving Credit and Term Loan Agreement dated December 5, 1995
(collectively, the "Loan Agreement"), the Banks made available to Borrower
credit facilities aggregating up to a maximum amount of One Hundred Million
Dollars ($100,000,000.00); and
WHEREAS, Borrower is in default under section 8.1(m) of the Loan
Agreement requiring that prior to opening a new retail store Borrower and its
Subsidiaries shall have delivered to Banks an executed Landlord Waiver,
Consent, Agreement and Certificate in that Borrower has not delivered such
document for the Onalaska Store (such missing document being referred to herein
as the "Onalaska Waiver"); and
WHEREAS, Borrower has agreed to cure the foregoing default by
delivering the Onalaska Waiver on or before February 14, 1996; and
WHEREAS, Borrower is in default under sections 7.1(i) (Consolidated
Tangible Net Worth), 7.1(k) (Consolidated Leverage Ratio), 7.1(l) (Consolidated
Current Ratio) and 7.1(n) (Profitability) of the Loan Agreement; and
WHEREAS, Borrower has requested that Banks extend the existing waiver
of the defaults under sections 7.1(i), 7.1(k), and 7.1(n) through February 14,
1996 and include the default under section 7.1(l) in such waiver; and
WHEREAS, Borrower is not meeting the time deadlines in section 5 of
the Third Amendment relating to sale of the catalog division, including that
Borrower does not expect to close on the
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sale of the catalog division and pay the Loans and all other Obligations in
full on or before January 31, 1996; and
WHEREAS, Borrower has requested that the January 31, 1996 deadline for
payment of the Loans and other Obligations be extended to February 14, 1996;
and
WHEREAS, Banks are willing to grant the foregoing requests on the
terms set forth herein but only if Borrower complies with the terms of this
Fourth Amendment.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and agreements set forth herein and in the Loan Agreement and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.
2. Waiver. (a) Banks temporarily waive the defaults previously
disclosed to Banks under sections 7.1(i), 7.1(k), 7.1(l) and 7.1(n) of the Loan
Agreement and section 5 of the Third Amendment for the period from the date
hereof until February 14, 1996 and temporarily waive the default caused by
Borrower's failure to deliver the Onalaska Waiver for the period from the date
hereof until February 14, 1996. The waiver does not extend beyond February 14,
1996 for the Onalaska Waiver or for the defaults under sections 7.1(i), 7.1(k),
7.1(l) and 7.1(n) of the Loan Agreement or section 5 of the Third Amendment,
and Banks do not waive any other default or any increase in the level of
noncompliance with sections 7.1(i), 7.1(k), 7.1(l) and 7.1(n) of the Loan
Agreement or section 5 of the Third Amendment. The Banks reserve the right to
exercise any rights and remedies available to Agent or any Bank prior to the
end of any waiver period if any other default comes to the attention of Banks
or if any information comes to the Banks' attention showing that Borrower's
level of noncompliance with section 7.1(i), 7.1(k), 7.1(l) or 7.1(n) of the
Loan Agreement or section 5 of the Third Amendment is greater than that
previously disclosed to Banks.
(b) Borrower shall pay the waiver fee described in section
2(b) of the Second Amendment to Banks as provided in the Second Amendment, but
if not paid sooner, such fee and all Loans and other Obligations shall be paid
in full on February 14, 1996.
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3. The Revolving Credit Loans. The language added to section 2.2 of
the Loan Agreement pursuant to section 4 of the Second Amendment as amended in
section 3 of the Third Amendment (excluding the paragraph captioned "Effect of
Harris Reserve") is further amended in its entirety to read as follows:
"Limitations on Borrowing during the Waiver Period. In
addition to complying with all other provisions of this section 2.2:
(a) Borrower shall not permit the outstanding balance
of the Revolving Credit Facility (including the undrawn amount
of unexpired letters of credit) to exceed (i) on or before
February 6, 1996, $55,000,000, and (ii) on or after February
7, 1996, $56,000,000. Banks waive any noncompliance with
section 7.1(t) of the Loan Agreement that may occur as a
result of borrowings within the limits imposed by this section
2.2(a).
(b) Borrower shall not permit the outstanding balance
of the Revolving Credit Facility (including the undrawn amount
of unexpired letters of credit) to exceed 69% of Eligible
Inventory.
(c) If Eligible Accounts Receivable are less than
$6,000,000, then an amount equal to the difference between
$6,000,000 and actual Eligible Accounts Receivable shall be
deducted from the amount that would otherwise be available for
borrowing under paragraphs 2.2(a) and 2.2(b) above.
In addition to all other remedies available to Banks upon the
occurrence of an Event of Default, the Banks shall not be obligated to
make any advance or issue any letter of credit if after such advance
or issuance Borrower would not be in compliance with section 2.2(a) or
2.2(b) above."
The paragraph in section 3 of the Third Amendment captioned "Effect of Harris
Reserve" remains in full force and effect and is not amended hereby.
4. Method of Borrowing. Section 2.2.1(b) of the Loan Agreement is
amended by deleting therefrom "Any Notice of Borrowing received by Bank One
before 11:00 a.m. on any Business Day shall be honored on the next succeeding
Business Day" and replacing it with "Any Notice of Borrowing received by Bank
One before 11:00 a.m. on any Business Day may or may not be honored on the same
Business Day and in any event shall be honored on the
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next succeeding Business Day."
5. Conditions to Amendment. This Fourth Amendment shall not be
effective until it shall have been fully executed and delivered and all of the
following have been delivered to Banks, executed as appropriate, in form and
substance satisfactory to Banks:
(a) Reaffirmation of Corporate Guaranty of GRS;
(b) Reaffirmation of Corporate Guaranty of GMO;
(c) Closing Certificates with Corporate Resolutions for Borrower,
GRS and GMO; and
(d) Legal opinion of Borrower's counsel as to the enforceability
of this Fourth Amendment and the Reaffirmations of Corporate
Guaranty delivered herewith.
6. Continuation of Agreements. Except as expressly amended and
modified herein, the Loan Agreement shall remain in full force and effect and
except as expressly amended and modified herein, the Notes shall remain in full
force and effect. All of the Collateral Documents, including but not limited
to the Security Agreement, the Mortgage, the Collateral Pledge Agreement and
Assignment of Security Interest, the Amended and Restated General Intangibles
Mortgage, the Subsidiary Guaranties and the Subsidiary Security Documents shall
remain in full force and effect as security for the Obligations and all of the
Collateral and Subsidiary Collateral as defined in the Loan Agreement, the real
estate encumbered by the Mortgage, the Subsidiary Notes, and the Stock of GRS
and GMO, shall secure all of the Obligations.
7. Release of Secured Party. Each of Borrower, GRS and GMO hereby:
(a) acknowledges that its obligations under the documents listed in section 6
hereof exist and are enforceable in accordance with their terms; and (b)
releases and waives any and all existing claims, counterclaims and causes of
action against Banks under the Loan Agreement, under any of the documents
listed in section 6 hereof, or otherwise relating to the Borrower as borrower,
GRS and GMO as subsidiaries of Borrower and guarantors, and Banks as lenders,
and which (i) are known to Borrower, GRS or GMO on the date hereof, or (ii)
exist on the date hereof based upon facts existing and known to Borrower, GRS
or GMO on the date hereof.
8. Expenses. Borrower shall pay the reasonable legal fees and
expenses of counsel for Bank One with respect to this Fourth Amendment and all
related documentation and, in addition, the
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reasonable legal fees and expenses, not exceeding Five Thousand Dollars
($5,000) per Bank, for each of NBD, Harris, LaSalle and Firstar.
9. Entire Agreement This Fourth Amendment, together with the Loan
Agreement, as amended hereby, constitutes the entire agreement of the Banks and
Borrower pertaining to the subject matter hereof and supersedes all prior or
contemporaneous agreements of the Banks and Borrower, whether oral or written,
other than the Loan Agreement, in connection therewith. This Fourth Amendment
may be amended or modified only in writing, executed by all of the parties.
This Fourth Amendment shall not constitute, nor shall it be deemed to
constitute:
(a) The commitment or agreement of Banks to extend credit in any
amount in the future, except as provided in this Fourth
Amendment or in the Loan Agreement as amended hereby;
(b) an obligation on the part of any Bank to enter into any future
amendment of the Loan Agreement;
(c) except as expressly set forth herein and for the period
provided herein, the waiver of any existing Event of Default
or of any subsequent Event of Default under the Loan Agreement
as amended hereby;
(d) the waiver of any right or remedy available to Bank under the
Loan Agreement or any of the Collateral Documents; or
(e) the commitment, agreement or obligation of any Bank to delay
the exercise of any right or remedy available to a Bank in the
future.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
BANK ONE, MILWAUKEE, NA
By ___________________________
LASALLE NATIONAL BANK
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By ___________________________
FIRSTAR BANK MILWAUKEE, N.A.
By ___________________________
HARRIS TRUST AND SAVINGS BANK
By ___________________________
NBD BANK
By ___________________________
GANDER MOUNTAIN, INC.
By ___________________________
The undersigned have read the foregoing and agree to be bound by all
of the terms and conditions contained therein except that the undersigned shall
not be directly obligated on any of the Loans except as otherwise provided in
the Loan Agreement as amended hereby, the Subsidiary Documents, the Subsidiary
Guaranties or any other agreement to which Borrower, GRS or GMO is a party.
GMO, INC.
By ___________________________
GRS, INC.
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By ___________________________
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