<PAGE>   1
                             ELEVENTH AMENDMENT TO
                           THIRD AMENDED AND RESTATED
                              REVOLVING CREDIT AND
                              TERM LOAN AGREEMENT


     THIS ELEVENTH AMENDMENT TO THIRD AMENDED AND RESTATED REVOLVING CREDIT AND
TERM LOAN AGREEMENT (this "Eleventh Amendment") is made as of the 17th 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 (the "Third Amended
Agreement") and amended by First Amendment (the "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 (the
"Fourth Amendment") to Third Amended and Restated Revolving Credit and Term
Loan Agreement dated January 23, 1996, Fifth Amendment (the "Fifth Amendment")
to Third Amended and Restated Revolving Credit and Term Loan Agreement dated
February 14, 1996, Sixth Amendment (the "Sixth Amendment") to Third Amended and
Restated Revolving Credit and Term Loan Agreement dated March 1, 1996, Seventh
Amendment (the "Seventh Amendment") to Third Amended and Restated Revolving
Credit and Term Loan Agreement dated March 18, 1996, Eighth Amendment (the
"Eight Amendment") to Third Amended and Restated Revolving Credit and Term Loan
Agreement dated April 1, 1996, Ninth Amendment (the "Ninth Amendment") to Third
Amended and Restated Revolving Credit and Term Loan Agreement dated April 15,
1996 and Tenth Amendment (the "Tenth Amendment") to Third Amended and Restated
Revolving Credit and Term Loan Agreement (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 closed on the sale of Borrower's catalog division
(as specifically defined in the UCC releases delivered by Banks in connection
with the closing, the "Catalog Division Assets") pursuant to an Asset Purchase
Agreement dated April 10, 1996 among Cabela's Incorporated, Borrower and GMO,
Inc. ("GMO"); and

     WHEREAS, by application of the proceeds of the Catalog 

<PAGE>   2


Division Assets to the Obligations, Borrower has paid the Term Loans in 
full and permanently reduced the outstanding balance of the Revolving Credit    
Loans; 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), 7.1(n) (Profitability), 7.1(w) (Adjustments to Covenants) and
8.1(m) (as it relates to delivery of the landlord waiver for the Onalaska
Store) of the Loan Agreement; and

     WHEREAS, Borrower has represented to Banks that Borrower is seeking a
purchaser for the remaining assets of Borrower and its Subsidiaries; 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), 7.1(n), 7.1(w) and 8.1(m)
through June 28, 1996 to allow Borrower to continue to seek a purchase for the
assets of Borrower and its Subsidiaries; and

     WHEREAS, Borrower and its financial advisors have prepared and provided to
Banks a projection of Borrower's borrowing requirements during the period from
the date hereof until June 29, 1996, a copy of which is attached hereto as
Exhibit A (the "Projections," which term shall refer to Exhibit A hereto and
shall not mean any updates prepared by Borrower without the Banks' written
consent); and

     WHEREAS, Based on the foregoing, and subject to Borrower's compliance with
all of the terms and conditions of the Loan Agreement as amended hereby, Banks
are willing to grant an extension of the waivers and an extension of the
maturity date of the Revolving Credit Loans as provided herein.


                              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 are hereby
acknowledged, the parties hereto hereby agree as follows:

     1.  Effect of Eleventh Amendment.  This Eleventh Amendment amends and
restates in their entirety the Second Amendment, the Third Amendment, the
Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh
Amendment, the Eighth Amendment, the Ninth Amendment and the Tenth Amendment.
Upon the effective date of this Eleventh Amendment, the Loan Agreement shall
consist of the Third Amended Agreement as amended by the First Amendment and
this Eleventh Amendment.

                                     -2-
<PAGE>   3


     2.  Effect of Payment of Term Loans.  The Term Loans have been paid in
full and no future advances will be made on the Term Loans.  The following are
deleted from the Loan Agreement: section 1.10, the last sentence of section
1.27, the last four words of section 1.59, section 1.100, section 1.101, the
last nine words of section 1.102, section 2.1, section 2.1.1, section 2.1.2,
section 2.1.3, section 2.1.4 and section 2.1.5.  Borrower and Banks acknowledge
that there are other references to the Term Loans in the Loan Agreement that
are not expressly deleted hereby and that nonetheless (a) no amounts may be
borrowed under the Term Loans, and (b) the Loan Agreement as amended hereby and
all of Borrower's and its Subsidiaries' obligations and all of Banks' rights
and remedies relating to the Revolving Credit Loans, the Collateral and the
Subsidiary Collateral remain in full force and effect.

     3.  Definitions.  Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Loan Agreement.

     a.  Borrowing Base.  The definition of "Borrowing Base" contained in
section 1(a) of the First Amendment is amended in its entirety to read as
follows:

           "Borrowing Base.  "Borrowing Base" shall mean that amount equal to
      the sum of (a) eighty-five percent (85%) of Accounts Receivable, (b) 
      sixty-nine percent (69%) of Eligible Inventory, plus (c) $6,820,000."

     b.  Funded Debt.  Section 1.41 of the Loan Agreement is amended in its
entirety to read as follows:

           "1.41  Funded Debt.  "Funded Debt" shall mean at any time the
      principal amount outstanding under the Revolving Credit Notes, including
      the undrawn amount of all unexpired letters of credit."

     c.  Index Borrowings.  The definition of "Index Borrowings" contained in
section 1(a) of the First Amendment is deleted in its entirety.

     d. Interest Period.  Section 1.51 of the Loan Agreement is deleted in its
entirety.

     e.  LIBOR.  Section 1.56 of the Loan Agreement is deleted in its entirety.

     f.  LIBOR Based Borrowings.  Section 1.57 of the Loan Agreement is deleted
in its entirety.

     g.  Notes.  Section 1.63 of the Loan Agreement is 

                                     -3-

<PAGE>   4


amended in its entirety to read as follows:

           "1.63  Notes.  "Notes" shall mean 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, together with all
      extensions, renewals, substitutions, replacements and refinancings
      thereof."

     h.  Overadvance Borrowings.  The definition of "Overadvance Borrowings"
contained in section 1(a) of the First Amendment is deleted in its entirety.

     i.  Overadvance Limit.  The definition of "Overadvance Limit" contained in
section 1(a) of the First Amendment is deleted in its entirety.

     j.  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 $36,500,000.
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 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."

     k.  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, (c) the closing of
      the sale of any substantial portion of the assets of Borrower and its
      Subsidiaries, (d) the failure of Borrower and its Subsidiaries to enter
      into a contract for sale of substantially all of the assets of Borrower
      and its Subsidiaries satisfactory to Borrower and Banks on or before June
      14, 1996, or if such contract is entered into, any 

                                     -4-

<PAGE>   5


        default under or termination or repudiation of such contract, or
        (e) June 28, 1996."

           l.  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 May 17, 1996 and executed by Borrower in favor of
      the respective Banks evidencing the Revolving Credit Loans, together with
      all, renewals, substitutions, replacements and refinancings thereof, the
      terms of which are incorporated herein by reference."

     4.  Waiver.  Banks temporarily waive the defaults previously disclosed to
Banks under sections 7.1(i), 7.1(k), 7.1(l), 7.1(n),  7.1(w) and 8.1(m) of the
Loan Agreement for the period from the date hereof until June 28, 1996.  The
waiver does not extend beyond June 28, 1996, 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), 7.1(n), 7.1(w) and 8.1(m) of the Loan Agreement, 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), 7.1(n), 7.1(w) or 8.1(m) of the Loan Agreement is greater than
that previously disclosed to Banks.

     5.  The Revolving Credit Loans.  Section 2.2 of the Loan Agreement is
amended in its entirety to read as follows:

           "2.2  The Revolving Credit Loans.

           (a)  Revolving Credit Loans.  From time to time prior to the
      Revolving Credit Commitment Termination Date, each Bank severally agrees
      to make Revolving Credit Loans on the terms and conditions set forth in
      this Agreement.  All Revolving Credit Loans shall be made by the Banks in
      the percentage that their respective Revolving Credit Commitment bears to
      the total Revolving Credit Commitment unless and until one Bank has
      reached the maximum of its Revolving Credit Commitment, at which time any
      remaining Revolving Credit Loans shall be made in such percentage that
      each of the remaining Banks' Revolving Credit Commitment bears to the
      aggregate amount of the Revolving Credit Commitment.  The amount of any
      Bank's Revolving Credit Loans outstanding at any one time shall never
      exceed the amount of such Bank's Revolving Credit Commitment.  All
      Revolving Credit Loans shall be evidenced by a Revolving Credit Note, the
      Borrower being obligated, however, to pay only the amount of the
      Revolving Credit Loans actually made, together with interest on the
      amount of Revolving Credit Loans actually made to the

                                     -5-
<PAGE>   6

      Borrower which remain outstanding from time to time.  The Borrower may
      borrow, repay and reborrow under the Revolving Credit Commitment subject
      to all of the terms and conditions of this Agreement.

           (b)  Effect of Letters of Credit.  In calculating the maximum
      aggregate amount outstanding under the Revolving Credit Facility, the
      undrawn amount of all unexpired letters of credit shall be considered
      outstanding on the Revolving Credit Facility.

           (c)  Limitations on Borrowing.

                (i)  The maximum aggregate principal outstanding under the 
      Revolving Credit Loans, including the amount of all unexpired letters
      of credit, shall not exceed the lesser of (A) $36,500,000 less any
      amounts applied to permanently reduce the Revolving Credit Facility
      pursuant to section 2.2(c)(ii)(A)(y) below, or (B) the Borrowing Base.

                (ii)  During the period from and after May 17, 1996, (A) all
      Receipts and other proceeds of Collateral or Subsidiary Collateral shall
      be paid to Agent (x) in the case of inventory sold or accounts paid in
      the ordinary course of business, to reduce the outstanding balance of the
      Revolving Credit Facility subject to reborrowing on all of the terms and
      conditions hereof, and (y) in the case of any other proceeds of
      Collateral, 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 reflected
      in the Projections, and (C) outstanding letters of credit issued on
      behalf of Borrower shall not exceed an aggregate amount outstanding at
      any time of $500,000.

      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 this section 2.2(c).  In the
      event the amount outstanding under the Revolving Credit Facility
      (including the undrawn amount of all unexpired letters of) exceeds the 
      amount permitted by this section 2.2(c), Borrower shall
      immediately repay the Revolving Credit Loans to comply with this section
      2.2(c).

           (d)  Effect of Harris Reserve.  Harris is reserving amounts under
      the Charge It Card Plan Merchant Agreement between Borrower and Harris
      (the "Merchant Agreement").  Harris and Banks intend to attempt to
      negotiate, and if agreement is reached enter into, an 

                                     -6-

<PAGE>   7


    Intercreditor Agreement pursuant to which Harris will transfer the
    funds that would otherwise have been held in such reserve for application
    to the Revolving Credit Loans and the Banks will grant to Harris an
    indemnity acceptable to Harris against credit card chargebacks and other
    obligations of Borrower, GRS, Inc. ("GRS") and GMO.  In such event, the
    amount calculated pursuant to section 2.2(c)(i) above shall be reduced from
    time to time by the maximum amount payable by Banks under such indemnity. 
    The provisions contained in this section 2.2(d) shall be applicable
    regardless of whether the credit card purchases processed by Harris arise
    from sales of Borrower, GRS or GMO.  Neither Harris nor any Bank shall have
    any obligations under this section 2.2(d) unless and until a written
    agreement, satisfactory to them in their sole discretion, has been executed
    and delivered; provided, however, that (a) Borrower, GRS and GMO agree that
    Banks have and are hereby granted a security interest in all amounts held
    by Harris, and all rights of Borrower, GRS or GMO against Harris, and (b)
    Harris agrees that (i) Harris is and shall remain the agent and bailee of
    Banks to the extent of any funds in the reserve held by Harris exceeding
    the amount needed to pay amounts owing to Harris under the Merchant
    Agreement, (ii) Harris is not acting as agent or bailee for any party other
    than Banks, and (iii) Harris will not pay any such excess amounts to any
    party other than Agent unless such other party has a legal right to such
    excess amounts prior to the rights of Banks.

           (e)  Use of Proceeds.  Borrower shall use proceeds of the Revolving
      Credit Facility only in amounts and for purposes reflected in the
      Projections."

     6.  Method of Borrowing.  Section 2.2.1(b) of the Loan  is amended by
deleting therefrom "Any Notice of Borrowing received by Bank One before 11:00
a.m. on any Business Day shall be honored on the next succeeding Business Day"
and replacing it with "Any Notice of Borrowing received by Bank One before
11:00 a.m. on any Business Day may or may not be honored on the same Business
Day and in any event shall be honored on the next succeeding Business Day."

     7.  Notes.  Section 2.2.2 of the Loan Agreement is amended in its entirety
to read as follows:

           "2.2.2  Notes.  The Revolving Loans are evidenced by five Revolving
      Credit Notes dated May 17, 1996 in the original aggregate principal
      amount of $36,500,000 payable to the order of the respective Banks."

     8.  Revolving Loan Interest Rate.  Section 2.2.3 of the Loan Agreement is
amended in its entirety to read as follows:

                                     -7-

<PAGE>   8


           "2.2.3  Interest Rate. The first $26,418,140.39 in principal
      outstanding on the Revolving Credit Loans shall bear interest, for each
      day from the date such Loan is made until it becomes due, at a rate equal
      to (i) in the case of Bank One Revolving Credit Loans, at a per annum
      rate equal to the Reference Rate, floating daily; and (ii) in the case of
      Harris, LaSalle, Firstar and NBD Revolving Credit Loans at a per annum
      rate equal to the Prime Rate, floating daily.  All principal outstanding
      on the Revolving Credit Loans in excess of $26,418,140.39 shall bear
      interest, for each day from the date such Loan is made until it becomes
      due, at a rate equal to (i) in the case of Bank One Revolving Credit
      Loans, at three percentage points (3.0%) per annum in excess of the
      Reference Rate, floating daily; and (ii) in the case of Harris, LaSalle,
      Firstar and NBD Revolving Credit Loans at three percentage points (3.0%)
      per annum in excess of the Prime Rate, floating daily.  Interest on all
      Revolving Credit Loans shall be paid to Bank One as Agent in arrears on
      the first day of each month commencing June 1, 1996."

     9.  Application of Payments. The following is added to the end of section
2.4.4:

      "This section shall not be construed to require any
       allocation among the Notes and other obligations so long as the
       payments are shared by the Banks on a pro rata basis."

     10.  Proceeds of Collateral.  The following is added after section 2.4 of
the Loan Agreement:

           "2.5  Proceeds of Collateral.

           2.5.1  Receipt and Credit for Collections.  Until their authority to
      do so is terminated by Banks at Bank's option, which option shall be
      available to Banks at any time after an Event of Default that is
      continuing, Borrower, GRS and GMO shall, at their own expense, collect
      all amounts unpaid on Receivables and all receipts from the sale or other
      disposition of Inventory (other than credit card transactions settled
      through Harris) and deliver in accordance with section 2.5.2 hereof
      immediately upon receipt, all checks, drafts, cash, notes, money orders,
      acceptances and other remittances, including payments on amounts owing to
      Borrower from GRS and GMO (collectively, "Receipts") received in part or
      full payment of or with respect to the Collateral or the Subsidiary
      Collateral in precisely the form received (but endorsed by Borrower, GRS
      or GMO, as applicable, if necessary for collection).  Until such delivery
      Borrower, GRS and GMO shall not commingle any Receipts with their own
      funds or any of their property or 

                                     -8-

<PAGE>   9


      use the Receipts in any way except to pay the Obligations (as defined     
      in the Security Agreement) but shall hold the Receipts in trust for
      Banks.  With respect to credit card transactions settled through Harris,
      all amounts otherwise payable to or for the account of Borrower, GRS or
      GMO pursuant to the Merchant Agreement shall be transferred by Harris to
      Bank One for application to the Obligations.

           2.5.2  Transfer of Receipts.  All Receipts received by Borrower, GRS 
      or GMO shall be transferred daily to one of the Local Deposit Accounts   
      described in Exhibit 11 to the Eleventh Amendment, and each day the
      available funds in each such account, including the LaSalle Account
      described on such Exhibit 11, shall be transferred to Agent, except that
      the available funds in the Local Deposit Accounts may be transferred to
      the LaSalle Account and then retransferred to and except that money paid
      to GRS for hunting and fishing licenses shall be paid to the state
      governmental entity entitled to such money. LaSalle and each bank at
      which Borrower, GRS or GMO has a Local Account shall enter into an
      agreement pursuant to which each day all available funds from Receipts
      deposited in such account (less any returned items or reversed ACH
      deposits) will be transferred to Agent for application to the Loans or
      will be transferred to the LaSalle Account for transfer to Agent for
      application to the Loans.  LaSalle has entered into an agreement
      pursuant to which all Receipts and all transfers from Local Banks to
      LaSalle are transferred to Agent daily for application to the Loans.
      
           2.5.3  Credit for Receipts.  If any Receipts are transferred to
      Agent in a form other than cash, the amount of such Receipts will be
      applied by Agent against the Obligations on the date such amounts become
      collected funds.  In the event that (a) any such item, the amount of
      which has been credited against the Obligations, is subsequently
      dishonored or otherwise returned unpaid to any Bank, or (b) any Bank
      makes any payment or grants any credit to any other bank by reason of or
      on account of (i) any check being dishonored or otherwise returned
      unpaid, (ii) any credit card charge being charged back, (iii) the
      reversal of any deposit made via ACH, or (iv) any other liability of
      Borrower, GMO or GRS, then Agent may retroactively debit the Borrower's
      Revolving Credit Loan for the amount of such item, or debit any
      commercial demand account of Borrower, GRS or GMO maintained with Bank
      for the amount of such item.

           2.5.4  Verification and Notification.  Banks may confirm and verify
      all Receivables in any reasonable manner, and Borrower, GRS and GMO shall
      assist Banks in so doing.  Banks may terminate Borrower's, GRS's and
      GMO's authority to collect Receipts at any time after an Event of Default
      that 

                                     -9-


<PAGE>   10


      is continuing.  Banks may at any time after an Event of Default that
      is continuing notify, or require the Borrower, GRS or GMO to notify, all
      of their respective Customers or any of them to make payment directly to
      Agent and the Agent may enforce collection of, settle, compromise, extend
      or renew the indebtedness of any or all of Borrower's, GRS's or GMO's
      Customers without liability of any kind except for the misconduct of 
      Banks.

           2.5.5  Authority to Perform for Borrower.  To the fullest extent
      permitted by law Borrower, GRS and GMO appoint each and every agent of
      Banks as attorney-in-fact for each of them to endorse the name of
      Borrower, GRS or GMO on any notes, acceptances, checks, drafts, money
      orders or other instruments for the payment of money or any security
      interest that may come into Banks' possession.  This power, because it is
      coupled with an interest, is irrevocable while any Obligation remains
      unpaid.  All acts of Banks or their appointee are hereby ratified and
      approved, and Banks or their appointee shall not be liable for any acts
      of commission or omission, nor for any error of judgment or mistake of
      fact or law, except for the willful misconduct of Banks."

     11.  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."

     12.  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 12.

     13.  Trademarks.  Exhibit 6.10 is deleted from the Third
Agreement and replaced with the attached Exhibit 6.10.

                                    -10-


<PAGE>   11


     14.  Financial Statements; Budgets.  Section 7.1(a)(9) of the Loan
Agreement is deleted and replaced with the following:
           "(9) Daily Financial Reports.  Prior to 5:00 o'clock on each
      Business Day, each of the following reports, current as of the end of the
      previous Business Day:

            (a) Receivables Aging;

            (b) Daily borrowing availability report including Eligible
                Inventory roll forward estimate and Eligible Accounts 
                Receivable; and

            (c) A certification (the "Compliance Certification") by an
                authorized officer of Borrower that Borrower is in compliance 
                with sections 2.2(c) hereof, which certificate shall be
                accompanied by a summary of the information used to calculate
                compliance and the detail of such calculation.

      with all of the foregoing to be in form and substance satisfactory to
      Banks and consistent with past reports delivered to the Agent.

           (10) Weekly Financial Reports.  Prior to 3:00 on each Friday, each
      of the following reports, based on Borrower's reasonable good faith
      estimates, current as of the end of the previous week:

            (a) Payables aging identifying the amount of any held checks and
                the amount due to Banks (float) and showing the
                information used to calculate the payables aging and the detail
                of such calculation;

            (b) a report in the form required by Agent and attached hereto as
                Exhibit 10 ("Borrowing Base Certificate") showing the
                current status and value of the Borrowing Base and reflecting
                the amount of Eligible Accounts Receivable and Eligible
                Inventory as of the end of the prior month, certified by an
                officer of Borrower.  The report shall also (i) certify that no
                Event of Default occurred and that no condition exists which,
                with notice or the lapse of time or both, would constitute an
                Event of Default, and (ii) be accompanied by a summary of the
                information used to calculate the Borrowing Base and the detail
                of such calculation;

            (c) weekly inventory report showing in-season and aged totals and
                identifying locations of inventory (at stores, at the
                distribution center or in transit); and

            (d) an update of the Projections.

                                    -11-

<PAGE>   12



      with all of the foregoing to be in form and substance satisfactory to
      Banks and consistent with past reports delivered to the Agent.  In
      addition, Borrower shall provide to the Agent any other information
      regarding Eligible Inventory and Eligible Accounts Receivable upon the
      reasonable request of the Agent."

     15.  Bank Accounts.  Section 7.1(m) of the Loan Agreement is amended in
its entirety to read as follows:

           "(m)  Bank Accounts.  Except as otherwise permitted by this section
      7.1(m), until such time as the Loans are repaid in full and all other
      Obligations are satisfied in full, Borrower and each of its Subsidiaries
      shall maintain all bank accounts (including but not limited to savings,
      checking, depository, payroll, disbursements and cash management services
      and accounts) at the Banks, in compliance with section 2.5.2 hereof.
      Borrower may maintain a payroll and refund account with the Bank of
      Richmond provided that the balance in said account is only the amount
      reasonably necessary to pay current payroll and refunds and does not
      exceed One Million Dollars ($1,000,000.00) on the date payroll checks are
      issued and Seven Hundred Fifty Thousand Dollars ($750,000.00) at all
      other times.  Borrower and GRS may maintain the Local Depository Accounts
      identified on Exhibit 11 to the Eleventh Amendment.  Neither Borrower nor
      its Subsidiaries shall open any bank accounts other than those identified
      on Exhibit 11 without the consent of Banks.  Sweeps of the cash in all
      bank accounts for retail stores shall be made for transfer to Agent or to
      LaSalle for retransfer to Agent, at least once each day that the
      transferor bank and transferee bank are open for business, to be applied
      to the Loans."

     16.  Prepayment of Revolving Credit Loans.  Section 7.1(r) of the Loan
Agreement is amended to read as follows:

           "(r)  Prepayment of the Revolving Credit Loans.  If the Revolving
      Credit Loans shall ever exceed the amount permitted under section 2.2
      hereof, the Borrower shall immediately repay the Revolving Credit Loans
      so that the outstanding Revolving Credit Loans are equal to or less than
      amount permitted by section 2.2 hereof."

     17.  Exhibit 9.  The list of retail stores attached as Exhibit 9 hereto is
substituted for Exhibit 9 to the Loan Agreement.

     18.  Sale of Assets.  Borrower shall proceed with due diligence and use
best efforts to seek a buyer for the remaining assets of Borrower and its
Subsidiaries on terms acceptable to 

                                    -12-


<PAGE>   13


Banks.  On Tuesday and Friday of each week, and at other times upon
request, Borrower shall provide Agent with a report regarding the progress of
(a) Borrower's efforts to sell all or a portion of the assets of Borrower, GRS
and/or GMO, (b) any efforts to obtain a contribution of capital to Borrower,
and (c) any actual, potential or proposed change of ownership or control of
Borrower, GRS or GMO under consideration by Borrower or its directors, which
report shall be in writing upon the request of Agent and shall be supplemented
from time to time with additional updated reports or other information upon the
request of Agent.

     19. Conditions to Amendment.  This Eleventh 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) Reaffirmation of Corporate Guaranty of GRS;

            (c) Reaffirmation of Corporate Guaranty of GMO;

            (d) Closing Certificates with Corporate Resolutions for Borrower,
                GRS and GMO;

            (e) Payment of the proceeds of the sale of the Catalog Division
                Assets;

            (f) The legal opinion required by the Tenth Amendment; and

            (g) Legal opinion of Borrower's counsel as to the enforceability of
                this Eleventh Amendment and the Reaffirmations of Corporate
                Guaranty delivered herewith.


        20.  Facility Fee.  Borrower shall pay a facility fee in the amount of
$100,818.59 on the date hereof, which fee shall be debited to the Revolving
Credit Loans on the date hereof.

        21.  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 May 17, 1996, and all of the
Collateral and Subsidiary Collateral as defined in the 

                                    -13-

<PAGE>   14


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 May 17, 1996.

        22.  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 June 28, 1996 to pursue the sale of its and its
Subsidiaries' assets, but in any event, Banks have not agreed and are not
obligated to continue to provide financing to Borrower beyond the Revolving
Credit Commitment Termination Date regardless of Borrower's success, if any, in
pursuing the sale of its and its Subsidiaries' assets.

        23.  Release of Secured Party.  Each of Borrower, GRS and GMO hereby:
(a) acknowledges that its obligations under the documents listed in section 21
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 21 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 hereof based upon facts existing and known to Borrower, GRS or GMO
on the date hereof.    

            
        24.  Expenses.  Borrower shall pay the reasonable legal fees and
expenses of counsel for Bank One with respect to this Eleventh 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.

        25.  Entire Agreement  This Eleventh 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 Eleventh
Amendment may be amended or modified only in writing, executed by all of the
parties.  This Eleventh 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 Eleventh 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;

                                    -14-



<PAGE>   15


      (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 ___________________________


LASALLE NATIONAL BANK



By ___________________________


FIRSTAR BANK MILWAUKEE, N.A.



By ___________________________


HARRIS TRUST AND SAVINGS BANK




By ___________________________


NBD BANK




By ___________________________

                                    -15-

<PAGE>   16


GANDER MOUNTAIN, INC.



By ___________________________





     The undersigned have read the foregoing and agree to be bound by all of
the terms and conditions contained therein except that the undersigned shall
not be directly obligated on any of the Loans except as otherwise provided in
the Loan Agreement as amended hereby, the Subsidiary  Documents, the Subsidiary
Guaranties or any other agreement to which Borrower, GRS or GMO is a party.
The undersigned reaffirm their respective guaranties of the Obligations.


GMO, INC.




By ___________________________


GRS, INC.



By ___________________________

                                    -16-

<PAGE>   17












                             ELEVENTH 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 17, 1996