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SIXTH 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
March 1, 1996
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SIXTH AMENDMENT TO
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AND
TERM LOAN AGREEMENT
THIS SIXTH AMENDMENT TO THIRD AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT (this "Sixth Amendment") is made as of the
1st day of March, 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,
Fourth Amendment to Third Amended and Restated Revolving Credit and Term Loan
Agreement dated January 23, 1996 and Fifth Amendment ("Fifth Amendment") to
Third Amended and Restated Revolving Credit and Term Loan Agreement dated
February 14, 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 March 18, 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
18, 1996; and
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WHEREAS, Borrower did not meet the time deadlines in section 5 of the
Third Amendment, as amended, relating to sale of the catalog division,
including that Borrower did not close on the sale of the catalog division and
pay the Loans and all other Obligations in full on or before March 1, 1996; and
WHEREAS, Borrower has requested that the March 1, 1996 deadline for
payment of the Loans and other Obligations be extended to facilitate its
efforts to sell the catalog division and/or restructure its capital structure;
and
WHEREAS, Banks are willing to grant an extension of waivers and
extension of the payment deadline to March 18, 1996 on the terms set forth
herein, but only if Borrower complies with the terms of the Sixth 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. 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 18, 1996."
b. 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 March 1, 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."
c. Term Loans. Section 1.100 of the Loan Agreement is
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amended in its entirety to read as follows:
"1.100 "Term Loans" or "$20,000,000 Loan" or "$19,500,000
Loan" shall mean any Loans made by the Banks to the Borrower pursuant
to section 2.1 of this Agreement."
d. 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 March 1, 1996 and executed by Borrower
in favor of the respective Banks evidencing the $19,500,000 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 18, 1996 and temporarily waive the default caused
by Borrower's failure to deliver the Onalaska Waiver for the period from the
date hereof until March 18, 1996. The waiver does not extend beyond March 18,
1996 for the Onalaska Waiver or beyond March 18, 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 18, 1996.
3. 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 $19,500,000 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 $19,500,000
Loan plus all accrued but unpaid interest on March 18, 1996."
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4. 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 March 1, 1996 in the original aggregate
principal amount of $56,000,000 payable to the order of the respective
Banks."
5. Conditions to Amendment. This Sixth 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;
(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 Sixth 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, including but
not limited to the Revolving Credit Notes dated March 1, 1996 and the
Promissory Notes dated March 1, 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 March 1, 1996 and the Promissory Notes dated March 1, 1996.
7. Bank Not Obligated to Continue Financing. Borrower acknowledges
that subject to the terms hereof, Banks have agreed to allow Borrower until
March 18, 1996 to pursue sale of the catalog division and/or begin other
financial restructuring, but
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in any event, Banks have not agreed to continue to provide financing to
Borrower after March 18, 1996 regardless of Borrower's favorable progress, if
any, toward sale of the catalog division.
8. Release of Secured Party. Each of Borrower, GRS and GMO hereby:
(a) acknowledges that its obligation 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 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.
9. Expenses. Borrower shall pay the reasonable legal fees and
expenses of counsel for Bank One with respect to this Sixth 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.
10. Entire Agreement This Sixth 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 Sixth Amendment
may be amended or modified only in writing, executed by all of the parties.
This Sixth 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 Sixth
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
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(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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