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FIFTH 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
February 14, 1996
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FIFTH AMENDMENT TO
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AND
TERM LOAN AGREEMENT
THIS FIFTH AMENDMENT TO THIRD AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT (this "Fifth Amendment") is made as of the
14th day of February, 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, Third Amendment (the "Third Amendment") to Third Amended and
Restated Revolving Credit and Term Loan Agreement dated December 5, 1995 and
Fourth Amendment to Third Amended and Restated Revolving Credit and Term Loan
Agreement dated January 23, 1996 (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 23, 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), 7.1(l) and 7.1(n) through March
1, 1996; and
WHEREAS, Borrower is not meeting the time deadlines in section 5 of
the Third Amendment, as amended, relating to sale of
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the catalog division, including that Borrower does not expect to close on the
sale of the catalog division and pay the Loans and all other Obligations in
full on or before February 14, 1996; and
WHEREAS, Borrower has requested that the February 14, 1996 deadline
for payment of the Loans and other Obligations be extended to March 1, 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
Fifth Amendment; and
WHEREAS, Banks desire to adjust their respective percentages of the
credit facilities evidenced by the Loan Agreement pursuant to the terms of this
Fifth 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.
a. Notes. Section 1.63 of the Loan Agreement is amended in
its entirety to read as follows:
"1.63 Notes. "Notes" shall mean the Promissory Notes and the
Revolving Credit Notes and any other promissory note from the Borrower
to one or more of the Agent and the Banks evidencing the Revolving
Credit Facility and the $20,000,000 Loan, together with all
extensions, renewals, substitutions, replacements and refinancings
thereof."
b. Revolving Credit Commitment. Section 1.86 of the Loan
Agreement is amended in its entirety to read as follows:
"1.86 Revolving Credit Commitment. "Revolving Credit Commitment
shall mean the commitment of the Banks to make Revolving Credit
Loans pursuant to this Agreement up to a maximum principal amount
outstanding of $56,000,000. Bank One's Revolving Credit Commitment
shall be equal to 30.11141% of the Revolving Credit Commitment less
the face amount of all unexpired letters of credit issued by Bank One
under the Revolving Credit Facility. LaSalle's Revolving Credit
Commitment shall be equal to 21.00269% of the Revolving Credit
Commitment. Firstar's Revolving Credit Commitment shall be equal to
14.77718% of the Revolving
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Credit Commitment. NBD's Revolving Credit Commitment shall be equal
to 19.33154% of the Revolving Credit Commitment less the face amount
of all unexpired letters of credit issued by NBD under the Revolving
Credit Facility. Harris' Revolving Credit Commitment shall be equal
to 14.77718% of the Revolving Credit Commitment."
c. Revolving Credit Commitment Termination Date. Section
1.87 of the Loan Agreement is amended in its entirety to read as follows:
"1.87 Revolving Credit Commitment Termination Date. Revolving
Credit Commitment Termination Date "shall mean the earlier of
(a) the date of an Automatic Event of Default, (b) the date of an
Other Event of Default not expressly waived in writing by the Banks,
or (c) March 1, 1996."
d. Revolving Credit Notes. Section 1.90 of the Loan
Agreement is amended in its entirety to read as follows:
"1.90 Revolving Credit Notes. "Revolving Credit Notes"
shall mean the five notes dated February 14, 1996 and executed by
Borrower in favor of the respective Banks evidencing the Revolving
Credit Loans, together with all extensions, renewals, substitutions,
replacements and refinancings thereof, the terms of which are
incorporated herein by reference."
e. Term Loans. Section 1.100 of the Loan Agreement is
amended in its entirety to read as follows:
"1.100 "Term Loans" or "$20,000,000 Loan" shall mean any Loans
made by the Banks to the Borrower pursuant to section 2.1 of this
Agreement."
f. Term Notes. Section 1.101 of the Loan Agreement is
amended in its entirety to read as follows:
"1.101 Promissory Notes. "Promissory Notes" or "Term Notes"
shall mean the five notes dated February 14, 1996 and executed
by Borrower in favor of the respective Banks evidencing the
$20,000,000 Loan, together with all extensions, renewals,
substitutions, replacements and refinancings thereof, the terms of
which are incorporated herein by reference."
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, as amended, for the period from
the date hereof until March 1, 1996 and temporarily waive the default caused by
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Borrower's failure to deliver the Onalaska Waiver for the period from the date
hereof until February 23, 1996. The waiver does not extend beyond February 23,
1996 for the Onalaska Waiver or beyond March 1, 1996 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, as amended, 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, as
amended. 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, as amended, 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 March 1, 1996.
3. Term Loan. Section 2.1 of the Loan Agreement is amended in its
entirety to read as follows:
"2.1 $20,000,000 Loan. The Banks and Borrower hereby acknowledge
that the Banks have made a loan to Borrower in the aggregate amount of
Twenty Million Dollars ($20,000,000). The $20,000,000 Loan is divided
among the Banks as follows ("Bank's Term Loan Percentage" or "Banks'
$20,000,000 Loan Percentage"): Bank One, 30.11141%; Firstar,
14.77718%; LaSalle, 21.00269%; NBD, 19.33154%; Harris 14.77718. Each
Bank's share of the $20,000,000 Loan shall be equal to such Bank s
$20,000,000 Loan Percentage."
4. Payments. Section 2.1.2 of the Loan Agreement is amended in its
entirety to read as follows:
"2.1.2 Payments. Interest on the $20,000,000 Loan shall be paid
to Bank One as Agent in arrears on the first day of each month.
Borrower shall pay the entire principal balance of the $20,000,000
Loan plus all accrued but unpaid interest on March 1, 1996."
5. Notes. Section 2.2.2 of the Loan Agreement is amended in its
entirety to read as follows:
"2.2.2 Note. The Revolving Loans are evidenced by five Revolving
Credit Notes dated February 14, 1996 in the original aggregate
principal amount of $56,000,000 payable to the order of the respective
Banks."
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6. Application of Payments. The following is added to the end of
section 2.4.4:
"This section shall not be construed to require any particular
allocation among the Notes and other obligations so long as the
payments are shared by the Banks on a pro rata basis."
7. Appointment and Authorization. Clause (vii) of section 4.1 of the
Loan Agreement is amended to read as follows:
"(vii) upon the occurrence and during the continuance of an Event of
Default, at the direction of the Required Banks, exercise and enforce
any and all rights and remedies available to it, whether arising under
this Agreement, the Notes, the Collateral Documents or under
applicable law, in any manner deemed appropriate by the Required
Banks."
8. Indemnification. Effective as of February 14, 1996, the
percentages set forth in section 4.6 of the Loan Agreement are amended to equal
the following:
Bank One 30.11141%
Firstar 14.77718%
LaSalle 21.00269%
NBD 19.33154%
Harris 14.77718%
For any indemnification relating to or arising from events occurring prior to
February 14, 1996, the percentages set forth in section 4.6 of the Loan
Agreement shall apply without giving effect to the amendment contained in this
section 8.
9. Daily Financial Reports. Section 7.1(a)(9) and (10) are amended to
add "Receivables aging" to section 7.1(a)(9) and delete it from section
7.1(a)(10), the effect of which is to require Borrower to deliver a Receivables
aging to Bank One prior to 3:00 p.m. on each Business Day.
10. Conditions to Amendment. This Fifth 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) Revolving Credit Notes;
(b) Promissory Notes;
(c) Reaffirmation of Corporate Guaranty of GRS;
(d) Reaffirmation of Corporate Guaranty of GMO;
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(e) Closing Certificates with Corporate Resolutions for Borrower,
GRS and GMO; and
(f) Legal opinion of Borrower's counsel as to the enforceability
of this Fifth Amendment and the Reaffirmations of Corporate
Guaranty delivered herewith.
11. 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, including but
not limited to the Revolving Credit Notes dated February 14, 1996 and the
Promissory Notes dated February 14, 1996, 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, including but not limited to the Revolving
Credit Notes dated February 14, 1996 and the Promissory Notes dated February
14, 1996.
12. Release of Secured Party. Each of Borrower, GRS and GMO hereby:
(a) acknowledges that its obligations under the documents listed in section 11
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 11 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.
13. Expenses. Borrower shall pay the reasonable legal fees and
expenses of counsel for Bank One with respect to this Fifth Amendment and all
related documentation and, in addition, the reasonable legal fees and expenses,
not exceeding Five Thousand Dollars ($5,000) per Bank, for each of NBD, Harris,
LaSalle and Firstar.
14. Entire Agreement This Fifth 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,
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other than the Loan Agreement, in connection therewith. This Fifth Amendment
may be amended or modified only in writing, executed by all of the parties.
This Fifth 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 Fifth
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
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LASALLE NATIONAL BANK
By
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FIRSTAR BANK MILWAUKEE, N.A.
By
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HARRIS TRUST AND SAVINGS BANK
By
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NBD BANK
By
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GANDER MOUNTAIN, INC.
By
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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
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GRS, INC.
By
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