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TENTH 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
May 1, 1996
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TENTH AMENDMENT TO
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AND
TERM LOAN AGREEMENT
THIS TENTH AMENDMENT TO THIRD AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT (this "Tenth Amendment") is made as of the
1st day of May, 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, Fifth Amendment to Third Amended and Restated
Revolving Credit and Term Loan Agreement dated February 14, 1996, Sixth
Amendment to Third Amended and Restated Revolving Credit and Term Loan
Agreement dated March 1, 1996, Seventh Amendment to Third Amended and Restated
Revolving Credit and Term Loan Agreement dated March 18, 1996, Eighth Amendment
to Third Amended and Restated Revolving Credit and Term Loan Agreement dated
April 1, 1996 and Ninth Amendment (the "Ninth Amendment") to Third Amended and
Restated Revolving Credit and Term Loan Agreement dated April 15, 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 has entered into an agreement for the sale of
Borrower's catalog division pursuant to an Asset Purchase Agreement (the "Sales
Contract") dated April 10, 1996 among Cabela's Incorporated ("Cabela's"),
Borrower and GMO, Inc. ("GMO"); and
WHEREAS, Borrower has represented to Banks that Borrower expects to
close such sale on or before May 25, 1996; and
WHEREAS, Borrower is in default under certain provisions of the Loan
Agreement; and
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WHEREAS, Banks have waived Borrower's known defaults for a period of
time pursuant to the Ninth Amendment, subject to certain limitations on
borrowing; and
WHEREAS, the Banks have a first priority security interest in and
assignment of the Sales Contract, and all proceeds of such contract will be
paid to Banks to be applied to the Obligations; and
WHEREAS, the Banks have a first priority security interest in and
assignment of the proceeds of a $10,000,000 Letter of Credit (the "Letter of
Credit") provided to Borrower by Cabela's to guaranty Cabela's compliance with
the Sales Contract, and the proceeds of any draw on such Letter of Credit will
be paid to Banks to be applied to the Obligations; and
WHEREAS, Borrower has requested that Banks amend one of the
limitations on borrowing contained in the Ninth 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. 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,
is further amended in its entirety to read as follows:
"Limitations on Borrowing. 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
$47,000,000 less any amounts applied to permanently reduce the
Revolving Credit Facility pursuant to (c)(A)(ii) below.
(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.
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(c) During the period from and after April 15, 1996,
(A) all Receipts and other proceeds of Collateral or
Subsidiary Collateral shall be paid to Agent (i) in the case
of inventory sold or accounts paid in the ordinary course of
business, first to reduce the outstanding balance of the
Revolving Credit Facility and second to pay the Term Loan, and
(ii) in the case of any other proceeds of Collateral, first to
pay the Term Loan and second to permanently reduce the
outstanding balance of the Revolving Credit Facility, (B) the
amount advanced from time to time under the Revolving Credit
Facility shall not be greater than the projections of
borrowing requirements made by the Borrower and previously
delivered to the Agent, (C) in no event shall the aggregate
advances during such period exceed $20,900,000, and (D)
outstanding letters of credit issued on behalf of Borrower
shall not exceed an aggregate amount outstanding at any time
of $500,000.
(d) During the period from and after April 15, 1996,
Borrower shall not receive any advance of proceeds of the
Revolving Credit Facility to pay Expenses (as defined
hereinafter) if Expenses exceed the sum of (i) Borrower s
Collections (as defined hereinafter) on a cumulative basis
commencing on April 15, 1996, and (ii) $1,000,000. For
purposes of this section (d), "Expenses" shall mean Retail
Direct Expenses, Retail Allocated Charges, Catalog Direct
Expenses, Catalog Allocated Charges, Interest Expense and
Principal Repayment, all as such terms are used in Borrower's
Operating Cashflow Forecast previously delivered to Agent,
plus all other expenses and expenditures of Borrower. For
purposes of this section (d), "Collections" shall mean Total
Collections from Operations, as such term is used in
Borrower's Operating Cashflow Forecast previously delivered
to Agent.
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),
2.2(b), 2.2(c) or 2.2(d) 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.
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3. Conditions to Amendment. This Tenth Amendment shall not be
effective until it shall have been fully executed and delivered and Borrower's
counsel's legal opinion covering the Ninth Amendment and this Amendment and the
attachment and perfection of the Banks' security interests in the Sales
Contract and the Letter of Credit shall have been delivered to Banks in form
and substance satisfactory to Banks.
4. 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 April 15, 1996 and the
Promissory Notes dated April 15, 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 April 15, 1996 and the Promissory Notes dated April 15, 1996.
5. Bank Not Obligated to Continue Financing. Borrower acknowledges
that subject to the terms of the Loan Agreement as amended hereby, Banks have
agreed to allow Borrower until May 25, 1996 to close the sale of the catalog
division and begin other financial restructuring, but in any event, Banks have
not agreed and are not obligated to continue to provide financing to Borrower
after the earlier of the closing of the sale of the catalog division or after
May 25, 1996 regardless of Borrower's success, if any, in closing the sale of
the catalog division or in accomplishing financial restructuring.
6. Release of Secured Party. Each of Borrower, GRS and GMO hereby:
(a) acknowledges that its obligations under the documents listed in section 4
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 4 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.
7. Expenses. Borrower shall pay the reasonable legal fees and
expenses of counsel for Bank One with respect to this Tenth
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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.
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8. Entire Agreement This Tenth 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 Tenth Amendment
may be amended or modified only in writing, executed by all of the parties.
This Tenth 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 Tenth
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 Banks 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.
The undersigned reaffirm their respective guaranties of the Obligations.
GMO, INC.
By
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GRS, INC.
By
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