Exhibit 10.1


 


TERM LOAN AGREEMENT


 


This
Term Loan Agreement (this “Agreement”),
dated as of June 9, 2008 is made by and among Gander Mountain Company, a
Minnesota corporation (the “Company”), and
the lenders named on the signature pages hereto (the “Lenders”).


 


RECITALS


 


A.            The Company desires to borrow money
from the Lenders, upon the terms and conditions stated in this Agreement, up to
an aggregate amount of $10,000,000.00.


 


B.            The capitalized terms used herein
and not otherwise defined have the meanings given them in ARTICLE VIII.


 


TERMS AND CONDITIONS


 


In
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Lenders hereby agree as follows:


 


ARTICLE I

ISSUANCE OF PROMISSORY NOTES


 


1.1           TERM LOANS.  In accordance with the terms of this
Agreement, the Lenders, at the written request of the Company, will make a
series of term loans (the “Term Loans”) to
the Company, on a ratable basis in accordance with the pro rata percentages set
forth on Schedule I, from time to time from the date hereof to and
including December 31, 2008 or the earlier termination of this Agreement
by the mutual agreement of the parties hereto, in an aggregate principal amount
not to exceed $10,000,000.00, with a maximum portion of the principal amount
for each Lender as is set forth on Schedule I.  The Company may prepay the Notes ratably in
accordance with the pro rata percentages set forth on Schedule I and the
terms of such Notes and may reborrow such prepaid amounts ratably under this
Agreement.


 


1.2           THE TERM NOTES.  The Term Loans made by the Lenders shall each
be evidenced by a promissory note (the “Note”) that is
in substantially the form of Exhibit A and is delivered to the
Lenders pursuant to the Agreement.  Any
Note issued pursuant to this Agreement shall have a maturity date of December 31,
2008 (the “Maturity Date”).


 


1.3           MAKING OF TERM LOANS.  The Company may request Term Loans under this
Agreement by giving at least five Business Days’ prior written notice to the
Lender, specifying the date of the requested Term Loan and the amount
thereof.  Any request for a Term Loan
shall be deemed to be a representation that the Borrower’s representations and
warranties contained in ARTICLE II are true and correct as of the date of the
Term Loan and as the date of the Note evidencing such Term Loan as though made
on and as of such dates and that no event has occurred and is continuing, or
will result from such Term Loan, that constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both; provided that any such request must be made of the Lenders
on a ratable basis in accordance with their pro rata percentages set forth on Schedule
I.


 


1.4           INTEREST.  The Notes will bear interest as described in
the Notes.  The interest will be payable
as set forth in the Notes.


 


1.5           PAYMENT.  Each Lender will pay the principal amount for
the Notes as is set forth in the notice provided under SECTION 1.3, by
wire transfer of immediately available funds in accordance with the Company’s
written wire instructions, simultaneously with delivery by the Company to each
Lender of the Note(s) in the principal amount(s) so purchased by such
Lender, and the Company will deliver such Notes against delivery of the
purchase price as described above.


 


 


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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF LENDERS


 


Each
Lender represents and warrants to the Company, severally and solely with
respect to itself and its purchase hereunder and not with respect to any other
Lender, that:


 


2.1           ORGANIZATION AND
QUALIFICATION.  To the extent
the Lender is an entity, the Lender is duly incorporated, validly existing and
in good standing under the laws of the state of organization, with full power
and authority (corporate and other) to own, lease, use and operate its
properties, if any, and to carry on its business as and where now owned,
leased, used, operated and conducted.  To
the extent the Lender is an entity, the Lender is duly qualified to do business
and is in good standing in every jurisdiction in which the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or in good standing would not have a Material
Adverse Effect.


 


2.2           AUTHORIZATION; ENFORCEMENT.  To the extent the Lender is an entity, (a) the
Lender has all requisite corporate power and authority to enter into and to
perform its obligations under this Agreement and its Note, to consummate the
transactions contemplated hereby and thereby and to purchase the Notes in
accordance with the terms hereof; (b) the execution, delivery and
performance of this Agreement and the Lender’s Note by the Lender and the
consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all required parties and no further consent or
authorization of Lender, its board of directors or its shareholders or members
is required; (c) this Agreement has been duly executed and delivered by
the Lender; and (d) assuming the valid and binding execution of this
Agreement and the Notes by the Company and compliance with the terms of this
Agreement and the Notes by the Company, each of this Agreement and the Lender’s
Note constitutes a legal, valid and binding obligation of the Lender
enforceable against the Lender by the Company in accordance with their
respective terms, except as may be limited by any applicable bankruptcy,
insolvency, reorganization, or moratorium or similar laws affecting the rights
of creditors generally and the application of general principles of
equity.  To the extent the Lender is a
natural person, this Agreement has been duly and validly authorized, executed
and delivered on behalf of the Lender and is a valid and binding agreement of
the Lender, enforceable in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and the application of general
principles of equity.


 


2.3           INVESTMENT PURPOSE.  The Lender is purchasing the Note(s) for
its own account and not with a present view toward the public sale or
distribution thereof, except pursuant to sales registered or exempted from
registration under the Securities Act.


 


2.4           ACCREDITED INVESTOR STATUS.  The Lender is an “accredited investor” as
defined in Rule 501(a) of Regulation D.


 


2.5           RELIANCE ON EXEMPTIONS.  The Lender understands that the Note(s) are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of, and the Lender’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Lender set forth herein in order to determine the
availability of such exemptions and the eligibility of the Lender to acquire
the Note(s).


 


2.6           INFORMATION AND
SOPHISTICATION.  The Lender
and its advisors, if any, have been furnished with all materials relating to
the business, finances and operations of the Company, and materials relating to
the offer and sale of the Note(s), that have been requested by the Lender or
its advisors, if any.  The Lender and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company.  The Lender acknowledges and
understands that its investment in the Note(s) involves a significant degree
of risk, including the risks reflected in the SEC Documents.  The Lender is 


 


 


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experienced
and knowledgeable in financial and business matters, is capable of evaluating
the merits and risks of investing in the Notes, and does not need or desire the
assistance of a knowledgeable representative to aid in the evaluation of such
risks who the Lender intends to use in connection with a decision as to whether
to purchase the Notes.


 


2.7           GOVERNMENTAL REVIEW.  The Lender understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Notes or an
investment therein.


 


2.8           TRANSFER OR RESALE. 
The Lender understands that:


 


                (a)           the Notes have not been and are not
being registered under the Securities Act or any applicable state securities
laws and, consequently, the Lender may have to bear the risk of owning the
Notes for an indefinite period of time because the Notes may not be transferred
unless (i) the resale of the Notes is registered pursuant to an effective
registration statement under the Securities Act; (ii) the Lender has
delivered to the Company an opinion of counsel satisfactory to the Company (in
form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Notes to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration; or (iii) the
Notes are sold or transferred pursuant to Rule 144;


 


                (b)           any sale of the Notes made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144 and, if Rule 144
is not applicable, any resale of the Notes under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with another exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and


 


                (c)           neither the Company nor any other person is under any
obligation to register the Notes under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder.


 


2.9           LEGENDS.  The Lender understands that until (a) the
Notes may be sold by the Lender under Rule 144(k) or (b) such
time as the resale of the Notes has been registered under the Securities Act,
the Notes will bear a legend restricting transfer.


 


2.10         RESIDENCY.  The Lender is a resident of the jurisdiction
set forth in the address for notice immediately below such Lender’s name on the
signature pages hereto.


 


2.11         NO BROKER FEES.  The Lender has not engaged any brokers,
finders, or agents, and the Lender has not incurred, and neither the Lender nor
the Company will incur, directly or indirectly, as a result of any action taken
by the Lender, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Agreement.


 


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY


 


The Company represents and warrants to the Lenders
that:


 


3.1           ORGANIZATION AND
QUALIFICATION. The Company is duly incorporated, validly existing
and in good standing under the laws of the State of Minnesota, with full power
and authority (corporate and other) to own, lease, use and operate its
properties, if any, and to carry on its business as and where now owned,
leased, used, operated and conducted. 
The Company is duly qualified to do business and is in good standing in
every jurisdiction in which the nature of the business conducted by it makes
such qualification necessary, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect.


 


 


3

















 


3.2           AUTHORIZATION; ENFORCEMENT.  (a) The Company has all requisite
corporate power and authority to enter into and to perform its obligations
under this Agreement and the Notes, to consummate the transactions contemplated
hereby and thereby and to issue the Notes in accordance with the terms hereof
and thereof; (b) the execution, delivery and performance of this Agreement
and the Notes by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including without limitation the issuance of
the Notes) have been duly authorized by the Company’s board of directors and no
further consent or authorization of the Company, its board of directors or its
shareholders is required; (c) this Agreement and the Notes have been duly
executed and delivered by the Company; and (d) assuming the valid and
binding execution of this Agreement by the Lender and compliance with the terms
of this Agreement and the Notes by such Lender, each of this Agreement and the
Notes constitutes a legal, valid and binding obligation of the Company
enforceable against the Company by such Lender in accordance with their
respective terms, except as may be limited by any applicable bankruptcy,
insolvency, reorganization, or moratorium or similar laws affecting the rights of
creditors generally and the application of general principles of equity.


 


3.3           ISSUANCE OF NOTES.  The Note(s) have been duly authorized
and, upon issuance in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable and free from all taxes, liens,
claims, encumbrances and charges with respect to the issuance thereof (other
than liens imposed by an Lender).


 


3.4           NO CONFLICTS; NO VIOLATION.


 


(a)           The execution, delivery and
performance of this Agreement and the Notes by the Company, and the
consummation by the Company of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or result in a violation of any
provision of the Company’s Articles of Incorporation or Bylaws, (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment
(including without limitation, the triggering of any anti-dilution provision),
acceleration or cancellation of, any agreement, indenture or instrument to
which the Company is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including U.S. federal and state
securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or by which any property or asset of the Company is bound or
affected (except, in the case of clauses (ii) and (iii), for such
conflicts, breaches, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect).


 


(b)           The Company is not in violation of
its Articles of Incorporation, Bylaws or other organizational documents and the
Company is not in default (and no event has occurred which with notice or lapse
of time or both could put the Company in default) under, and the Company has not
taken any action or failed to take any action that (and no event has occurred
which, without notice or lapse of time or both) would give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party or by which any
property or assets of the Company is bound or affected, except for possible
defaults as would not, individually or in the aggregate, have a Material
Adverse Effect.  Without limiting the
foregoing, the Company is not in breach of, or default under, the documents
evidencing the Senior Debt, and will not be in breach of, or default under, the
documents evidencing the Senior Debt as a result of the consummation by the
Company of the transactions contemplated by this Agreement and the Notes,
including the issuance and payment of such Notes.  The Company reasonably believes, as of the
date of this Agreement and as of the date of issuance of any Note contemplated
by this Agreement, that the Company is able to, and will, pay in full on the
Maturity Date the principal sum of any Note, together with interest on the
unpaid principal amount thereof, and that such payment will not cause or result
in a breach or default under any 


 


 


4

















 


documents
evidencing the Senior Debt or any other agreement, indenture or instrument to
which the Company is a party.


 


(c)           Except as specifically contemplated
by this Agreement and as required under the Securities Act and any applicable
state securities laws or any listing agreement with any securities exchange or
automated quotation system, the Company is not required to obtain any consent,
authorization or order of (other than those obtained on or prior to the date
hereof), or make any filing or registration with, any court or governmental
agency or any regulatory or self regulatory agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or the Notes in
each case in accordance with the terms hereof or thereof, or to issue and sell
the Notes in accordance with the terms hereof.


 


3.5           SEC DOCUMENTS.  Since the closing date of the Company’s
initial public offering, the Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the Exchange Act (all of the
foregoing filed prior to the date hereof being referred to herein as the “SEC Documents”).  As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Exchange Act or the Securities Act, as the case
may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, other than SEC Documents that have been
amended as of the date hereof.


 


3.6           NO BROKER FEES.  The Company has not engaged any brokers,
finders, or agents, and the Company has not incurred, and neither the Company
nor any Lender will incur, directly or indirectly, as a result of any action
taken by the Company, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Agreement.


 


ARTICLE IV

COVENANTS


 


4.1           USE OF PROCEEDS.  The Company will use the proceeds from the
sale of the Notes for general corporate purposes, which may include the
repayment of debt to institutional lenders.


 


4.2           EXPENSES.  Except as otherwise set forth in this
Section, each party will pay its own fees and expenses, as well as the fees and
expenses of its own advisors and consultants, in connection with the
transactions contemplated by this Agreement. 
Upon the execution of this Agreement, the Company will pay the
reasonable out-of-pocket expenses incurred by the Lenders in connection with
the transactions herein contemplated, including without limitation, the fees
and out-of-pocket expenses of any legal counsel to the Lenders in connection
with the transactions herein contemplated, up to an aggregate amount of $10,000
for all such counsel.  The Company will
also pay all fees and expenses incurred by the Lenders with respect to any
amendments or waivers requested by the Company (whether or not the same become
effective) under or in respect of this Agreement.


 


4.3         FINANCIAL INFORMATION.  In the event the Company is no longer subject
to the reporting requirements of the Exchange Act, the Company will deliver to
the Lenders within 45 days after the end of each fiscal quarter other than the
Company’s fourth fiscal quarter and 90 days after the end of the Company’s
fiscal year, the financial statements of the Company, prepared in accordance
with United States generally accepted accounting principles (subject to the
absence of footnotes and normal year-end adjustments for quarterly financial
statements), consistently applied, and audited by the Company’s independent
public accountants in the case of year-end financial statements.


 


5

















 


4.4           CORPORATE EXISTENCE.  The Company will maintain its corporate
existence in good standing.  The Company
will conduct its business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, including,
without limitation, all applicable local, state and federal environmental laws
and regulations, except where the failure to comply with such laws, rules and
regulations would not have a Material Adverse Effect.


 


4.5           AFFILIATE TRANSACTIONS.  Without the approval of the audit committee
of the Company’s board of directors, the Company will not enter into or commit
directly or indirectly to any arrangement or transaction (i) in which the
Company purchases, rents or leases property or assets from, or sells,
transfers, or disposes of any material properties or assets (regardless of
whether in the ordinary course of business or not) to any Affiliate or (ii) in
which the Company loans any money or other property to any Affiliate.


 


ARTICLE V

CONDITIONS TO THE LENDER’S OBLIGATION TO PURCHASE


 


The
obligation of each Lender hereunder to purchase the Notes from the Company is
subject to the satisfaction, on or before each Closing, of each of the
following conditions.  These conditions
are for each Lender’s respective benefit and may be waived by any Lender at any
time in its sole discretion:


 


5.1           The Company will have delivered to
the Lender the duly executed Notes in the amounts specified.


 


5.2           The representations and warranties of
the Company must be true and correct in all material respects as of the Closing
as though made at that time (except for representations and warranties that
speak as of a specific date, which representations and warranties must be true
and correct as of such date) and the Company must have performed and complied
in all material respects with the covenants and conditions required by this
Agreement to be performed or complied with by the Company at or prior to the
Closing.


 


5.3           No litigation, statute, rule,
regulation, executive order, decree, ruling or injunction will have been
enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation
of any of the transactions contemplated by this Agreement.


 


5.4           There shall exist at the time of
Closing no condition or event which would constitute an Event of Default (as
hereinafter defined) or which, after notice or lapse of time or both, would
constitute an Event of Default.


 


5.5           Each other Lender shall have
purchased a Note in a principal amount reflecting such Lender’s ratable
obligation under the applicable Term Loan request delivered by the Company in
accordance with SECTION 1.3.


 


5.6           The Lenders shall have received an
opinion from Faegre & Benson LLP, counsel to the Company, in the form
attached hereto as Exhibit B.


 


ARTICLE VI

DEFAULT


 


                6.1           EVENTS OF DEFAULT.  Each of the following events shall be an
event of default (an “Event of Default”)
for purposes of this Agreement:


 


                                (a)           if default shall be made in the
punctual payment of interest on the Notes, and such default shall have
continued for a period of ten days after written notice thereof to the Company
by the holder of any of the Notes; or


 


 


6

















 


                                (b)           if default shall be made in the
punctual payment of any installment of the principal of the Notes and such
default shall have continued for a period of five days after written notice
thereof to the Company by the holder of any of the Notes; or


 


                                (c)           if a trustee or receiver is appointed
for the Company or for substantially all of the Company’s assets and the order
of such appointment is not discharged, vacated or stayed within 60 days after
such appointment; or


 


                                (d)           if any judgment, writ or warrant of
attachment or of any similar process in an amount in excess of $10,000,000
shall be entered or filed against the Company or against any of the property or
assets of the Company and remains unpaid, unvacated, unbonded or unstayed for a
period of 60 days; or


 


                                (e)           if an order for relief shall be
entered in any Federal bankruptcy proceeding in which the Company is the
debtor; or if bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceedings, or other proceedings for relief under any bankruptcy
or similar law or laws for the relief of debtors, are instituted by or against
the Company and, if instituted against the Company, are consented to or, if
contested by the Company, are not dismissed by the adverse parties or by an order,
decree or judgment within 60 days after such institution; or


 


                                (f)            if the Company shall default in any
material respect in the due and punctual performance of any covenant or
agreement in the Senior Debt and such default shall continue for more than the
period of notice and/or grace, if any, therein specified and shall have thereby
caused the acceleration of all amounts due under the Senior Debt, which
acceleration shall not have been cured or waived; or


 


                                (g)           if default shall be made in the due
and punctual performance or observance of any other term contained in this
Agreement or the Notes, and such default shall have continued for a period of
30 days after the earlier of the Company’s knowledge thereof or written notice
thereof to the Company by the holder of any Note.


 


                6.2           REMEDIES UPON EVENTS OF
DEFAULT.  For so long as any
Note remains outstanding, upon the occurrence of an Event of Default as herein
defined, and so long as such Event of Default continues unremedied, then, each
holder of any Notes shall be entitled by notice to declare the principal
of and any accrued interest on the Notes, to be immediately due and payable,
and thereupon the Notes, including both principal and interest shall become
immediately due and payable; provided, however, that when any Event of Default
described in SECTION 6.1(e) has occurred, the Notes shall immediately
become due and payable without presentment, demand or notice of any kind.  In addition, from and after receipt of
written notice to the Company from the holder of a Note following the
occurrence of an Event of Default, and during the continuation thereof, the
rate per annum at which interest shall accrue on the unpaid principal balance
of the holder’s Note shall increase by 2%.


 


                6.3           NOTICE OF DEFAULTS.  When, to its knowledge, any Event of Default
has occurred or exists, the Company agrees to give written notice within ten
Business Days of such Event of Default to the holders of all outstanding
Notes.  If the holder of any Notes shall
give any notice or take any other actions in respect of a claimed Event of
Default, the Company will forthwith give written notice thereof to all other
holders of Notes at the time outstanding, describing such notice or action and
the nature of the claimed Event of Default.


 


                6.4           SUITS FOR ENFORCEMENT.  In case any one or more Events of Default
shall have occurred and be continuing, any holder of the Notes may proceed to
protect and enforce its rights under this Article by suit in equity or
action at law.  It is agreed that in the
event of such action such holders of Notes shall be entitled to receive all
reasonable fees, costs and expenses incurred, including without 


 


 


7

















 


limitation
such reasonable fees and expenses of attorneys (whether or not litigation is
commenced) and reasonable fees, costs and expenses of appeals.


 


                6.5           REMEDIES CUMULATIVE.  No right, power or remedy conferred upon any
holder of Notes shall be exclusive, and each such right, power or remedy shall
be cumulative and in addition to every other right, power or remedy, whether
conferred hereby or by any such security or now or hereafter available at law
or in equity or by statute or otherwise.


 


                6.6           REMEDIES NOT WAIVED.  No course of dealing between the Company and
any Lender or the holder of any Notes, and no delay in exercising any right,
power or remedy conferred hereby or by any such security or now or hereafter
existing at law or in equity or by statute or otherwise, shall operate as a
waiver of or otherwise prejudice any such right, power or remedy; provided,
however, that this SECTION 6.6 shall not be construed or applied so as to
negate the provisions and intent of any statute that is otherwise applicable.


 


ARTICLE VII

INDEMNIFICATION


 


7.1           INDEMNIFICATION BY COMPANY.  In consideration of each Lender’s execution
and delivery of this Agreement and its acquisition of the Notes hereunder, and
in addition to all of the Company’s other obligations under this Agreement and
the Notes, the Company will defend, protect, indemnify and hold harmless each
Lender and each other holder of the Notes and all of their shareholders,
officers, directors, employees, advisors and direct or indirect investors and
any of the foregoing person’s agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (regardless of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred or suffered by an Indemnitee as a result of, or arising out of, or
relating to (a) any breach of any representation or warranty made by the
Company herein or in any other certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation
of the Company contained herein or in any other certificate, instrument or
document contemplated hereby or thereby, or (c) any cause of action, suit
or claim brought or made against such Indemnitee and arising out of or
resulting from the execution, delivery, performance, breach or enforcement of
this Agreement or the Notes by the Company. 
To the extent that the foregoing undertaking by the Company is
unenforceable for any reason, the Company will make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities that is
permissible under applicable law.


 


7.2           INDEMNIFICATION BY LENDERS.  Each Lender, severally and not jointly, will
defend, protect, indemnify and hold harmless the Company all of its
shareholders, officers, directors, employees and direct or indirect investors
and any of the foregoing person’s agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated
by this Agreement) (collectively, the “Company Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (regardless of whether any such Company Indemnitee is a party to the
action for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Company
Liabilities”) incurred by a Company Indemnitee solely as a result of,
or arising solely out of, or relating solely to (a) any breach of any
representation or warranty made by such Lender herein or in any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Lender contained herein
or in any other certificate, instrument or document contemplated hereby or
thereby, or (c) the failure of an Lender to comply with 


 


 


8

















 


the
requirements of the Securities Act or any state securities laws, which failure
is not caused by the negligence or willful misconduct of the Company.


 


ARTICLE VIII

DEFINITIONS


 


·      “Affiliate” has the meaning set
forth in Rule 405 promulgated under the Securities Act.


 


·      “Business Day” means any day
except a Saturday, Sunday or other day on which either the New York Stock
Exchange is closed, or on which commercial banks in New York or Minnesota are
authorized by law to close.


 


·      “Change in Control” means (a) the date that any person or group
(excluding the Erickson Family, David C. Pratt, Gratco, LLC, the David
C. Pratt Irrevocable Grantor Retained Annuity Trust, dated 12/1/92 and their Affiliates) becomes the beneficial
owner of 40% or more of the equity securities of the Company entitled to vote
for directors or (b) the last date of any period of 12 consecutive months
where a majority of the Company’s board of directors ceases to be composed of
individuals who were members of the Company’s board of directors on the first
day of such period or whose election was approved by such continuing majority
of directors (in all cases, excluding any director whose election occurs as a
result of an actual or threatened solicitation of proxies or consents).


 


·      “Closing” means the closing of the
purchase and sale of the Note(s) under this Agreement.


 


·      “Company” means Gander Mountain
Company, a Minnesota corporation.


 


·      “Erickson Family” means the
descendants of Arthur T. and Elsie P. Erickson and Alfred W. and Rose E.
Erickson, or trusts established primarily for the benefit of such descendants
and/or their spouses or relatives.


 


·      “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, or any similar successor statute.


 


·      “Indemnified Liabilities” has the
meaning set forth in ARTICLE VII.


 


·      “Indemnitees” has the meaning set
forth in ARTICLE VII.


 


·      “Lenders” means the lenders whose
names are set forth on the signature pages of this Agreement, and their
permitted transferees.


 


·      “Material Adverse Effect” means a
material adverse effect on (a) the assets, liabilities, business,
properties, financial condition or results of operations of the Company, or (b) the
ability of the Company to perform its obligations under this Agreement.


 


·      “Nasdaq” means the Nasdaq Global
Select Market, the Nasdaq Global Market or the Nasdaq Capital Market, or their
successors.


 


·      “Notes” means the Promissory Notes
issuable pursuant to this Agreement, in the form attached hereto as Exhibit A,
and all promissory notes of the Company issued in exchange or substitution
therefor.


 


·      “Regulation D” means Regulation D
as promulgated by the SEC under the Securities Act.


 


·      “Rule 144” and “Rule 144(k)” mean Rule 144 and Rule 144(k),
respectively, promulgated under the Securities Act, or any successor rule.


 


·      “SEC” means the United States
Securities and Exchange Commission.


 


 


9

















 


·      “SEC Documents” has the meaning
set forth in SECTION 3.5.


 


·      “Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute.


 


·      “Senior Debt” means the Company’s
indebtedness under that certain Fourth Amended and Restated Loan and Security
Agreement, dated December 6, 2007, among Gander Mountain Company, Bank of
America, N.A., as agent, Bank of America Securities, LLC, as the lead arranger,
Wells Fargo Foothill, Inc., as the syndication agent, The CIT
Group/Business Credit, Inc., as collateral agent, General Electric Capital
Corporation, as documentation agent, and the lenders named therein, as may be
amended from time to time.


 


·      “Term Loans” has the meaning set
forth in SECTION 1.1.


 


ARTICLE IX

GOVERNING LAW; MISCELLANEOUS


 


9.1           GOVERNING LAW;
JURISDICTION.  This Agreement
will be governed by and interpreted in accordance with the laws of the State of
Minnesota without regard to the principles of conflict of laws.  The parties hereto hereby submit to the
exclusive jurisdiction of the United States federal and state courts located in
the State of Minnesota with respect to any dispute arising under this
Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby. 
The parties also agree that any disputes arising under this Agreement
will be exclusively venued in the United States federal and state courts
located in the State of Minnesota, except for actions or proceedings regarding
the enforcement of awards or judgments.


 


9.2           COUNTERPARTS; SIGNATURES
BY FACSIMILE.  This Agreement
may be executed in two or more counterparts, all of which are considered one
and the same agreement and will become effective when counterparts have been
signed by each party and delivered to the other parties.  This Agreement, once executed by a party, may
be delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.


 


9.3           HEADINGS.  The headings of this Agreement are for
convenience of reference only, are not part of this Agreement and do not affect
its interpretation.


 


9.4           SEVERABILITY.  If any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision will be deemed modified in order to conform with such statute or rule of
law.  Any provision hereof that may prove
invalid or unenforceable under any law will not affect the validity or
enforceability of any other provision hereof.


 


9.5           ENTIRE AGREEMENT.  This Agreement and the Notes constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein.  This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.


 


                9.6           CONSENTS; WAIVERS AND
AMENDMENTS.  Except as
otherwise specifically provided herein, in each case in which approval of the
Lenders is required by the terms of this Agreement, such requirement shall be
satisfied only upon receipt of the written consent of the holders of a majority
of the outstanding principal amount of the Notes, which consent shall bind the
holders of all of the outstanding Notes; provided, however, that no change or
modification to the maturity date, interest rate or payment dates shall be
effective as to a holder of Notes without the prior written consent of such
holder.


 


 


10

















 


                9.7           CHANGES, WAIVERS, ETC.  Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.


 


9.8           NOTICES.  Any notices required or permitted to be given
under the terms of this Agreement must be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and will be effective
five days after being placed in the mail, if mailed by regular U.S. mail, or
upon receipt, if delivered personally, by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a
party.  The addresses for such
communications are:


 




	
  If to the Company:

  	
   

  	
  Gander Mountain Company

  
	
   

  	
   

  	
  180 East Fifth Street, Suite 1300

  
	
   

  	
   

  	
  Saint Paul, Minnesota 55107

  
	
   

  	
   

  	
  Attn: Chief Financial Officer

  
	
   

  	
   

  	
  Facsimile:
  (651) 325-2001

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
  180 East Fifth Street, Suite 1300

  
	
   

  	
   

  	
  Saint Paul, Minnesota 55107

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Facsimile:
  (651) 325-2001

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  Faegre &
  Benson LLP

  
	
   

  	
   

  	
  2200
  Wells Fargo Center

  
	
   

  	
   

  	
  90
  South Seventh Street

  
	
   

  	
   

  	
  Minneapolis,
  Minnesota 55402-3901

  
	
   

  	
   

  	
  Attn:
  W. Morgan Burns

  
	
   

  	
   

  	
  Facsimile:
  (612) 766-1600

  






 


If
to an Lender:  To the address set forth
immediately below such Lender’s name on the signature pages hereto.


 


Each
party will provide written notice to the other parties of any change in its
address.


 


9.9           SUCCESSORS AND ASSIGNS.  This Agreement is binding upon and inures to
the benefit of the parties and their successors and assigns.  The Company will not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
Lenders, and no Lender may assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Company, except that any
Lender may assign this Agreement to an affiliate over which it maintains
majority control.  This provision does
not limit the Lender’s right to transfer the Notes pursuant to the terms of
this Agreement or to assign the Lender’s rights hereunder to any such
transferee pursuant to the terms of this Agreement.


 


9.10         THIRD PARTY BENEFICIARIES.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.


 


9.11         SURVIVAL.  All representations and warranties contained
herein shall survive the execution and delivery of this Agreement, any
investigation at any time made by the Lenders or on their behalf, and the sale
and purchase of the Notes and payment therefor. 
All statements contained in any certificate, instrument or other writing
delivered by or on behalf of the Company pursuant hereto or in connection with
or contemplation of the transactions herein contemplated shall constitute
representations and warranties by the Company hereunder.


 


9.12         PUBLICITY.  The Company and each Lender have the right to
review, a reasonable period of time before issuance thereof, any press
releases, or relevant portions of any SEC or Nasdaq filings or any other public
statements, with respect to the transactions contemplated hereby.  However, the Company may make any press
release or SEC or Nasdaq filings with respect to such transactions as 


 


 


11

















 


are
required by applicable law and regulations (including Financial Industry
Regulatory Authority requirements) without the prior approval of the Lenders
(although the Company will make reasonable efforts to consult with the Lenders
in connection with any such press release prior to its release and filing).


 


9.13         FURTHER ASSURANCES.  Each party will do and perform, or cause to
be done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.


 


9.14         NO STRICT CONSTRUCTION.  The language used in this Agreement is deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.


 


9.15         EQUITABLE RELIEF.  Each party recognizes that, if it fails to
perform or discharge any of its obligations under this Agreement, any remedy at
law may prove to be inadequate relief to the other parties.  Each of the parties therefore agrees that the
other parties are entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.


 


9.16         INDEPENDENT NATURE OF
LENDERS’ OBLIGATIONS AND RIGHTS. 
The obligations of each Lender under either its Notes or this Agreement
are several and not joint with the obligations of any other Lender, and no
Lender shall be responsible in any way for the performance of the obligations
of any other Lender under a Note or this Agreement.  Nothing contained herein or in any Note or
this Agreement, and no action taken by any Lender pursuant thereto, shall be
deemed to constitute the Lenders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Lenders
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by this Agreement.  Each Lender shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such
purpose.  Each Lender has been
represented by its own separate legal counsel in their review and negotiation
of their Notes or this Agreement.  The
Company has elected to provide all Lenders with the same terms for the
convenience of the Company and not because it was required or requested to do
so by the Lenders.


 


9.17         TRUSTS AND OTHER ENTITY
LENDERS.  To the extent any
holder of Notes is a trust or other entity, the trustee or officers, directors,
employees, partners, members or other control persons of such trust or entity
shall be bound by the terms of this Agreement as it relates to the Notes held
by such trust or other entity.  Each
Lender agrees that it will cause such persons to execute and deliver to the
Company an acknowledgement of the obligations set forth in this Section to
the extent reasonably requested by the Company.


 


[Reminder of Page Left Blank Intentionally —
Signature Pages Follow]


 


 


12

















 


IN
WITNESS WHEREOF, the undersigned Lenders and the Company have caused this
Agreement to be duly executed as of the date first above written.


 




	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GANDER
  MOUNTAIN COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Robert
  J. Vold

  
	
   

  	
   

  	
   

  	
  Senior
  Vice President and Chief Financial Officer

  






 


 

















 




	
   

  	
   

  	
  LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRATCO
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  David
  C. Pratt

  
	
   

  	
   

  	
   

  	
  Manager

  






 


ADDRESS:


 


GRATCO LLC


7701 Forsyth Boulevard, Suite 1125


St.
Louis, Missouri 63105


 


(any
notice hereunder to this Lender shall also include a copy to):


 


Mark R. Gale, Esq.


7701 Forsyth Boulevard, Suite 1125


St.
Louis, Missouri 63105


 




	
   

  	
   

  	
  HOLIDAY
  COMPANIES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Ronald
  A. Erickson

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  






 


ADDRESS:


 


Holiday
Companies


4567
American Boulevard West


Minneapolis,
Minnesota 55437


Attention:
President


 


(any
notice hereunder to this Lender shall also include a copy to):


 


Holiday
Companies


4567
American Boulevard West


Minneapolis,
Minnesota 55437


Attention:
Legal Department


 


 


 

















 


SCHEDULE I


TO TERM LOAN AGREEMENT


 


	
  MAXIMUM PRINCIPAL AMOUNT:

  	
   

  	
   

  	
   

  	
  $10,000,000.00

  	
   

  



                


 


	
  Lender

  	
   

  	
  Portion of Maximum Principal Amount

  	
   

  	
  Pro Rata Percentage

  	
   

  
	
  GRATCO LLC

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  	
  50.0

  	
  %

  
	
  Holiday Companies

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  	
  50.0

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  	
  100.0

  	
  %

  



 


 


I-1

















 


EXHIBIT A


TO TERM LOAN AGREEMENT


 


FORM OF PROMISSORY NOTE


 


THIS PROMISSORY NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES (COLLECTIVELY, THE “ACTS”).  THE PROMISSORY NOTE MAY NOT BE SOLD,
DISTRIBUTED, OFFERED, PLEDGED, ENCUMBERED, ASSIGNED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF THE FOLLOWING: (1) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE PROMISSORY NOTE UNDER THE ACTS COVERING THE TRANSACTION, (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACTS, OR (3) THE COMPANY
OTHERWISE SATISFIES ITSELF THAT REGISTRATION IS NOT REQUIRED UNDER THE ACTS.


 


GANDER MOUNTAIN COMPANY


 


PROMISSORY
NOTE


 




	
  Due: December 31,  2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $[            ]

  	
   

  	
  Original Issue
  Date: [           ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Promissory Note
  No.: [        ]

  






 


For value received, the
undersigned, Gander Mountain Company, a Minnesota corporation (the “Company”), hereby promises to pay to the order of [                      ]
(the “Lender”), at the Company’s principal
office in the City of Saint Paul, Minnesota, the principal sum of $[                  ],
plus all accrued and unpaid interest thereon, in lawful money of the United States
on December 31, 2008 (the “Maturity Date”),
together with interest on the unpaid principal amount thereof, as more fully
provided below.


 


                The interest rate per annum for this Promissory Note
(the “Note”) will initially be as set forth on
SCHEDULE I.  The amount of interest for
each day this Note is outstanding (the “Daily Interest Amount”)
will be calculated by dividing the interest rate in effect for that day by 360
and multiplying the result by the principal amount of this Note.  The amount of interest to be paid on this
Note for each Interest Period (as defined below) will be calculated by adding
the Daily Interest Amounts for each day in the Interest Period.


 


                Interest on this security will be paid on each October 31
and April 30, commencing on the first of such dates following issuance of
this security, and at maturity.  Each of
these dates on which interest will be paid is referred to as an “Interest Payment Date.” 
If an Interest Payment Date would
fall on a day that is not a Business Day, such Interest Payment Date will be
postponed to the following day that is a Business Day.


 


                On each Interest Payment Date, the Company will pay
interest for the period commencing on the next day immediately following the
most recent Interest Payment Date and ending on the then-current Interest
Payment Date.  This period is referred to
as an “Interest Period.”  The first Interest Period will begin on and
include the date of issuance of this security and, subject to the immediately
preceding paragraph, will end on and include the first Interest Payment Date.


 


                All percentages resulting from any of the above
calculations will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded upwards
(e.g., 4.876545% (or .04876545) being rounded to 4.87655% (or .0487655)) and
all dollar amounts used in or resulting from such calculations will be rounded
to the nearest cent (with one-half cent being rounded upwards).


 


                The interest rate on this Note will in no event be
higher than the maximum rate permitted by Minnesota law as the same may be
modified by United States law of general application.


 


                All calculations of the Company, in the absence of
manifest error, shall be conclusive for all purposes.


 


A-1

















 


                Any amounts to be paid on this Note will be payable
by the Company in cash, by check or by wire transfer to the holder of this Note
to such account as the holder may request.


 


                This Note has been issued under the terms and
provisions of a Term Loan Agreement (the “Loan  Agreement”), dated as of June 9, 2008, among the
Company and the Lenders named on the signature pages thereto, as may be
amended from time to time.  Capitalized
terms used but not defined in this Note shall have the meanings ascribed to
them in the Loan Agreement.


 


                Upon the occurrence of any one or more of the Events
of Default specified in Article VI of the Loan Agreement, all amounts then
remaining unpaid on this Note, including any accrued but unpaid interest, may
be declared to be or shall become immediately due and payable as provided in
the Loan Agreement.  In addition, from
and after receipt of written notice to the Company from the holder following
the occurrence of an Event of Default, and during the continuation thereof, the
rate per annum at which interest shall accrue on the unpaid principal balance
hereof shall increase by 2%.


 


                This Note is subject to the following additional
provisions, terms and conditions:


 


                1.             CHANGE IN CONTROL.  In
the event of a Change in Control, the holder hereof shall have the option (the “Change in Control Option”) to (a) have this Note
assumed by the surviving entity or (b) require that this Note be redeemed
by the Company in whole (but not in part) at 100% of the outstanding unpaid
principal amount, plus all unpaid interest accrued thereon to the effective
date of the Change in Control.  The
Company shall give the holder of this Note written notice of such impending
transaction not later than 20 days prior to the shareholders’ meeting of the
Company called to approve such transaction, or 20 days prior to the closing of
such transaction, whichever is earlier. 
The notice shall give the proposed effective date of the transaction
(the “Effective Date”) and shall describe the
material terms and conditions of the transaction.  Any election to exercise the Change in
Control Option shall be made by the holder hereof giving written notice thereof
to the Company at least five days before the Effective Date (if no such notice
is given, the Company shall be entitled to elect one of these options).  Upon receipt of such notice, the Company
shall, on the Effective Date, take the action selected or applicable under this
Section.


 


                2.             RESALE RESTRICTIONS. 
The holder of this Note covenants and agrees that it is subject to the
resale restrictions set forth in Section 2.8 of the Loan Agreement.


 


3.             PREPAYMENT.  The Company may prepay this Note, upon
providing the holder five calendar days written notice prior to the date of
prepayment, in whole or in part at any time without penalty; provided, that any
such prepayment will be applied first to interest accrued and unpaid on the
principal amount being repaid and second, if the amount of prepayment exceeds
the amount of all such accrued and unpaid interest, to the repayment of the
unpaid principal amount.


 


4.             WAIVER OF
PRESENTMENT.  Presentment or other demand for payment, notice
of dishonor and protest are expressly waived.


 


5.             MISCELLANEOUS.


 


                                (a)           NOTICES.  Any notice, request or other communication
required or permitted hereunder will be given in accordance with the Loan
Agreement.


 


                                (b)           NO RIGHTS AS SHAREHOLDERS.  This Note will not entitle any holder hereof
to any of the rights of a shareholder of the Company.


 


                                (c)           GOVERNING LAW; JURISDICTION.  This Agreement will be governed by and
interpreted in accordance with the laws of the State of Minnesota without
regard to the principles of conflict of laws. 
The parties hereto hereby submit to the exclusive jurisdiction of the
United States federal and state courts located in the State of Minnesota with
respect to any dispute arising under this Note. 
The parties also agree that any disputes arising under this Note will be
exclusively venued in the United States federal and state courts located in the
State of Minnesota, except for actions or proceedings regarding the enforcement
of awards or judgments.


 


                (d)           HEADINGS.  The headings of this Note are for convenience
of reference only, are not part of this Note and do not affect its
interpretation.


 


                (e)           SUITS
FOR ENFORCEMENT.  In case any one or more
Events of Default shall have occurred and be continuing, the holder of this
Note may proceed to protect and enforce its rights under this Note by suit in 


 


 


A-2

















 


equity or action at
law.  It is agreed that in the event of
such action the holder of the Note shall be entitled to receive all reasonable
fees, costs and expenses incurred, including without limitation such reasonable
fees and expenses of attorneys (whether or not litigation is commenced) and
reasonable fees, costs and expenses of appeals.


 


[Reminder of Page Left Blank Intentionally — Signature Page Follows]


 


 


A-3

















 


IN WITNESS WHEREOF, the
undersigned has caused this Note to be duly executed as of the issue date.  Receipt of this Note constitutes the Lender’s
acceptance of the terms hereof.


 


 




	
   

  	
   

  	
  GANDER MOUNTAIN COMPANY

  
	
   

  	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Robert J. Vold

  
	
   

  	
   

  	
   

  	
  Senior Vice President and Chief
  Financial Officer

  






 


 


A-4

















 


SCHEDULE I


TO PROMISSORY NOTE


 


INTEREST
RATE SCHEDULE


 


	
  Period

  	
   

  	
  Interest Rate (per annum)

  
	
  June 9, 2008
  through August 2, 2008

  	
   

  	
  5.16%

  
	
  August 3, 2008
  through November 1, 2008

  	
   

  	
  1 year LIBOR as of
  August 2, 2008, plus 1.0%

  
	
  November 2, 2008
  through December 31, 2008

  	
   

  	
  1 year LIBOR as of
  November 1, 2008, plus 1.0%

  
	
  After December 31,
  2008

  	
   

  	
  1 year LIBOR as of the
  last day of the most recently completed fiscal quarter of the Company, plus
  1.0%

  



 


 


A-5

















 


EXHIBIT B


TO TERM LOAN AGREEMENT


 


FORM OF LEGAL OPINION


 


1.             The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Minnesota.


 


2.             The Company has corporate power and
authority to enter into and perform its obligations under the Agreement.


 


3.             The Agreement and the Notes have
been duly authorized, executed and delivered by, and are valid and binding
agreements of, the Company, enforceable in accordance with their terms, except
as rights to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors’ rights
generally or by general equitable principles.


 


4.             No consent, approval, authorization
or other order of, or registration or filing with, any court or other
governmental authority or agency, is required for the Company’s execution,
delivery and performance of the Agreement and consummation of the transactions
contemplated thereby, except as required under the Securities Act of 1933 and
the Securities Exchange Act of 1934 and applicable state securities or blue sky
laws.


 


5.             The execution and delivery of the
Agreement and the Notes by the Company and the performance by the Company of
its obligations thereunder (other than performance by the Company of its
obligations under the indemnification sections of the Agreement, as to which no
opinion is rendered) (i) will not result in any violation of the
provisions of the charter or bylaws of the Company; (ii) will not
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company pursuant to the documents evidencing the Senior Debt; or (iii) to
our knowledge, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company.


 


 


B-1