Exhibit 10.2


 


STOCK PURCHASE AGREEMENT

(GRATCO LLC)


 


This
STOCK PURCHASE AGREEMENT (this “Agreement”),
dated as of December 6, 2007, is made by and among Gander Mountain Company, a
Minnesota corporation (the “Company”), and
the investors named on the signature pages hereto (the “Investors”).


 


RECITALS


 


A.            The Company and the Investors are
executing and delivering this Agreement in reliance upon the exemptions from
securities registration afforded by Section 4(2) of the Securities Act  and Rule 506 under Regulation D.


 


B.            The Investors desire, upon the terms
and conditions stated in this Agreement, to purchase the Company’s Common
Stock, for an aggregate purchase price of $18,083,500.00.


 


C.            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 Investors hereby agree as follows:


 


ARTICLE I

PURCHASE AND SALE OF COMMON STOCK


 


1.1           Purchase and Sale of Common Stock.
At the Closing, subject to the terms of this Agreement and the satisfaction or
waiver of the conditions set forth in ARTICLES
VI and VII, the Company will issue and sell to each Investor, and each
Investor will (on a several and not a joint basis) purchase from the Company,
that number of shares of Common Stock (collectively, the “Shares”)
set forth beneath such Investor’s name on the signature pages hereof.


 


1.2           Payment. Each Investor will
pay $5.90 per share for each share of Common Stock, by wire transfer of
immediately available funds in accordance with the Company’s written wire
instructions and the Company will deliver the Shares against delivery of the
purchase price as described above. As additional consideration for the Shares,
the Investors will deliver, on the Closing Date, guaranties in mutually
acceptable form of the Company’s subordinated term loan to be funded on the
Closing Date. Notwithstanding anything in this Agreement to the contrary, if
the purchase of any Shares hereunder would cause the Company to violate Nasdaq
Marketplace Rule 4350(i) as a result of the transactions contemplated hereby
and any related transactions, then the sale and purchase of Shares hereunder
shall be rescinded as to such number of Shares as is required to comply with
Nasdaq Marketplace Rule 4350(i). The parties hereto agree to take all actions
necessary to effect such rescission, including, without limitation, the
tendering and endorsement of stock certificates and return of the appropriate
amount of purchase price.


 


1.3           Closing Date. Subject to the
satisfaction or waiver of the conditions set forth in ARTICLES VI and VII, the Closing will take place at a
mutually acceptable time on December    , 2007, or at another
date or time agreed upon by the parties to this Agreement (the “Closing Date”). The Closing will be held at the offices of
Faegre & Benson LLP in Minneapolis, Minnesota, or at such other place as
the parties agree.


 


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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF INVESTORS


 


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


 


2.1           Organization and Qualification.
To the extent the Investor is an entity, the Investor is duly incorporated or
organized, 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
Investor is an entity, the Investor 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 Investor is an entity, (a) the Investor has all requisite
power and authority to enter into and to perform its obligations under this
Agreement, to consummate the transactions contemplated hereby and thereby and
to purchase the Common Stock in accordance with the terms hereof; (b) the
execution, delivery and performance of this Agreement by the Investor and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all required parties and no further consent or authorization of
Investor, its board of directors, shareholders, trustees or members is
required; (c) this Agreement has been duly executed and delivered by the
Investor; and (d) assuming the valid and binding execution of this Agreement by
the Company and compliance with the terms of this Agreement by the Company,
this Agreement constitutes a legal, valid and binding obligation of the
Investor enforceable against the Investor by the Company in accordance with
their respective terms, except as may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and the application of general principles of equity. To the
extent the Investor is a natural person, this Agreement has been duly and
validly authorized, executed and delivered on behalf of the Investor and is a
valid and binding agreement of the Investor, 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
Investor is purchasing the Common Stock 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
Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D.


 


2.5           Reliance on Exemptions. The
Investor understands that the Common Stock is 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 Investor’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of the Investor to acquire the Common Stock.


 


2.6           Information and Sophistication.
The Investor 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 Common Stock, that have been requested by
the Investor or its advisors, if any. The Investor and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. The
Investor acknowledges and understands that its investment in the Common Stock
involves a significant degree of risk, including the risks reflected in the SEC
Documents. 


 


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


 


2.7           Governmental Review. The
Investor 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 Common Stock or an investment therein.


 


2.8           Transfer or Resale. The
Investor understands that:


 


(a)           except as provided in ARTICLE XI, the Shares have not been and
are not being registered under the Securities Act or any applicable state
securities laws and, consequently, the Investor may have to bear the risk of
owning the Shares for an indefinite period of time because the Shares may not
be transferred unless (i) the resale of the Shares is registered pursuant
to an effective registration statement under the Securities Act; (ii) the
Investor 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 Shares to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; or (iii) the Shares are sold or transferred pursuant to Rule 144;


 


(b)           any sale of the Shares 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 Shares 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)           except as set forth in ARTICLE XI, neither the Company nor any
other person is under any obligation to register the Shares 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 Investor
understands that until (a) the Shares may be sold by the Investor under Rule
144(k) or (b) such time as the resale of the Shares has been registered under
the Securities Act as contemplated by ARTICLE
XI, the certificates representing the Shares will bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Shares):


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE 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
SECURITIES 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 SECURITIES 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.


 


The legend set forth above will be removed and the Company will issue a
certificate without the legend to the holder of any certificate upon which it
is stamped, in accordance with the terms of ARTICLE V.


 


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2.10         Residency. The Investor is a
resident of the jurisdiction set forth immediately below such Investor’s name
on the signature pages hereto.


 


2.11         No Intent to Effect a Change of
Control. The Investor has no present intent to change or influence the
control of the Company within the meaning of Rule 13d-1 of the Exchange Act.


 


2.12         No Broker Fees. The Investor has
not engaged any brokers, finders, or agents, and the Investor has not incurred,
and neither the Investor nor the Company will incur, directly or indirectly, as
a result of any action taken by the Investor, 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 Investors 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.


 


3.2           Authorization; Enforcement. (a) The
Company has all requisite corporate power and authority to enter into and to
perform its obligations under this Agreement, to consummate the transactions
contemplated hereby and to issue the Common Stock in accordance with the terms
hereof; (b) the execution, delivery and performance of this Agreement by
the Company and the consummation by it of the transactions contemplated hereby
(including without limitation the issuance of the Common Stock in accordance
with the Company’s Articles of Incorporation and this Agreement) have been duly
authorized by the Company’s board of directors or a committee thereof formed
pursuant to Section 302A.241 of the Minnesota Statutes, and no further consent
or authorization of the Company, its board of directors or its shareholders is
required; (c) this Agreement has been duly executed and delivered by the
Company; and (d) assuming the valid and binding execution of this Agreement by
the Investor and compliance with the terms of this Agreement by such Investor,
this Agreement constitutes a legal, valid and binding obligation of the Company
enforceable against the Company by such Investor in accordance with its terms,
except as may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors generally
and the application of general principles of equity.


 


3.3           Issuance of Securities. The
Common Stock has 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 Investor).


 


3.4           No Conflicts; No Violation.


 


(a)           The execution, delivery and
performance of this Agreement by the Company, and the consummation by the
Company of the transactions contemplated hereby (including, without limitation,
the issuance of the Common Stock) 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 


 


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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.


 


(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,
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 in accordance with the terms hereof, or to
issue and sell the Common Stock 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. Except for the
Mercanti Group, LLC, Company has not engaged any brokers, finders or agents,
and the Company has not incurred, and neither the Company nor any Investor 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, except for fees and expenses
payable to Mercanti Group, LLC, which shall be paid by the Company.


 


ARTICLE IV

COVENANTS


 


4.1           Best Efforts. Each party will
use its best efforts to satisfy in a timely fashion each of the conditions to
be satisfied by it under ARTICLES VI
and VII of this Agreement.


 


4.2           Form D; Blue Sky Laws. The
Company will file a Notice of Sale of Securities on Form D with respect to the
Shares, as required under Regulation D. The Company will take such action as it
reasonably determines to be necessary to qualify the Shares for sale to the
Investors under this 


 


5

















 


Agreement under applicable securities (or “blue sky”) laws of the
states of the United States (or to obtain an exemption from such qualification).
The Company will file with the SEC a Current Report on Form 8-K disclosing this
Agreement and the transactions contemplated hereby within four business days after
the date of this Agreement and will make any required notice filings with state
securities law authorities on a timely basis.


 


4.3           Expenses. Except as otherwise
set forth in this SECTION 4.3,
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 consummation of the sale of the Common
Stock anticipated by this Agreement, the Company will pay the reasonable out-of-pocket
expenses incurred by the Investors in connection with the transactions herein
contemplated, including without limitation, the fees and out-of-pocket expenses
of one special counsel to the Investors in connection with the transactions
herein contemplated, up to an aggregate amount of $15,000. The Company will
also pay all fees and expenses incurred by the Investors 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 and the fees and
expenses set forth in SECTION
11.21.


 


4.4           Sales by
Investors. Each Investor will sell any Shares sold by it in compliance with
applicable prospectus delivery requirements, if any, or otherwise in compliance
with the requirements for an exemption from registration under the Securities
Act and the rules and regulations promulgated thereunder. No Investor will make
any sale, transfer or other disposition of the Shares in violation of federal
or state securities laws or the restrictive provisions set forth in this
Agreement.


 


4.5           Use of Proceeds. The Company
will use the proceeds from the sale of the Shares for general corporate
purposes, which may include the repayment of debt to institutional lenders or
the funding of the purchase price, fees or expenses associated with the
acquisition known as “Project Tar Heel.”


 


ARTICLE V

TRANSFER AGENT INSTRUCTIONS; REMOVAL OF LEGENDS


 


5.1          Issuance of Certificates. The
Company will instruct its transfer agent to issue certificates, registered in
the name of each Investor as set forth on the signature pages to this
Agreement, for Common Stock in such amounts as specified on the signature pages
to this Agreement. All such certificates will bear the restrictive legend
described in SECTION 2.9.


 


5.2          Unrestricted Securities. If,
unless otherwise required by applicable state securities laws, (a) the
resale of the Shares represented by a certificate has been registered under an
effective registration statement filed under the Securities Act, (b) a
holder of Shares provides the Company and the Transfer Agent with an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Shares may be made without registration under the Securities Act and such sale
either may occur without restriction on the manner of such sale or transfer,
(c) such holder provides the Company and the Transfer Agent with
reasonable assurances that such Shares can be sold under Rule 144, or
(d) the Shares represented by a certificate can be sold without
restriction as to the number of securities sold under Rule 144(k), the Company
will permit the transfer of the Shares, and the Transfer Agent will issue one
or more certificates, free from any restrictive legend, in such name and in
such denominations as specified by such holder.


 


ARTICLE VI

CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL


 


The
obligation of the Company to issue and sell the Shares to each Investor at the
Closing is subject to the satisfaction by such Investor, on or before the
Closing Date, of each of the following 


 


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conditions. These conditions are for the Company’s sole benefit and may
be waived by the Company at any time in its sole discretion:


 


6.1           The Investor will have executed this
Agreement and will have delivered this Agreement to the Company.


 


6.2           The Investor will have delivered the
purchase price for the Common Stock to the Company in accordance with this
Agreement, including the guaranties of indebtedness referenced in Section 1.2
above.


 


6.3           The representations and warranties of
the Investor must be true and correct in all material respects as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, which representations and
warranties must be correct as of such date), and the Investor will 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
Investor at or prior to the Closing.


 


6.4           No 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.


 


6.5           The acquisition by the Company known
as “Project Tar Heel” shall have closed or shall be closing simultaneously with
the Closing hereunder.


 


ARTICLE VII

CONDITIONS TO THE INVESTOR’S OBLIGATION TO PURCHASE


 


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


 


7.1           The Company will have executed this
Agreement and will have delivered this Agreement to the Investor.


 


7.2           The Company will have delivered to
the Investor the Shares in the amounts specified in SECTION 1.1.


 


7.3           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.


 


7.4           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.


 


7.5           Trading and listing of the Common
Stock on the Nasdaq must not have been suspended by the SEC or the Nasdaq, nor
shall Nasdaq have notified the Company of any failure of the Company to meet
any of the continued listing standards.


 


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7.6           The Investors will have received an
opinion from Faegre & Benson LLP, counsel to the Company, in the form
attached hereto as Exhibit A.


 


7.7           The Company shall have received the
consent of the Erickson Family to the granting of registration rights by this
Agreement as required by that certain Registration Rights Agreement dated as of
March 11, 2004 by and among the Company and members of the Erickson Family.


 


7.8           The Company shall have received any
consent required under the definitive agreements or instruments governing the
Senior Debt to be received prior to the execution of this Agreement or the
consummation of the transactions contemplated hereby.


 


7.9.          The acquisition by the Company known
as “Project Tar Heel” shall have closed or shall be closing simultaneously with
the Closing hereunder.


 


ARTICLE VIII

INDEMNIFICATION


 


8.1           Indemnification by Company. In
consideration of each Investor’s execution and delivery of this Agreement and
its acquisition of the Shares hereunder, and in addition to all of the
Company’s other obligations under this Agreement, the Company will defend,
protect, indemnify and hold harmless each Investor and each other holder of the
Shares 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, (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
by the Company or (d) the status of such Investor or holder of the Shares
as an investor in the Company to the extent such status arises from actions or
inaction by the Company in violation of law. 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.


 


8.2           Indemnification by Investors. Each
Investor, 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 Investor herein or in any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Investor contained
herein or in any other certificate, instrument or document contemplated hereby
or thereby, or (c) the failure of an Investor 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 IX

DEFINITIONS


 


•                  “Closing” means
the closing of the purchase and sale of the Shares under this Agreement.


 


•                  “Closing Date”
has the meaning set forth in SECTION  1.3.


 


•                  “Common Stock”
means the common stock, par value $0.01  per share, of
the Company.


 


•                  “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.


 


•                  “Investors”
means the investors 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 Market or the Nasdaq Capital Market.


 


•                  The terms “register,”
“registered,” and “registration”
refer to a registration effected by preparing and filing a Registration
Statement or statements in compliance with the Securities Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness of such
Registration Statement by the SEC.


 


•                  “Registrable Securities”  means the Shares and any shares of capital stock issued or
issuable from time to time (with any adjustments) in exchange for or otherwise
with respect to the Shares, and any shares of Common Stock issued to other
investors on the Closing Date pursuant to purchase agreements in substantially
the same form as this Agreement and any shares of capital stock issued or
issuable from time to time (with any adjustments) in exchange for or otherwise
with respect to such shares of Common Stock.


 


•                  “Registration Period”
means the period between the Required Effective Date (as defined in SECTION 12.2) and the earlier of
(i) the date on which all of the Registrable Securities have been sold and
no further Registrable Securities may be issued in the future, or (ii) the
date on which all the Registrable Securities may be immediately sold without
registration and without restriction (including without limitation as to volume
by each holder thereof) as to the number of Registrable Securities to be sold,
pursuant to Rule 144 or otherwise.


 


•                  “Registration Statement”
means a registration statement of the Company filed under the Securities Act.


 


•                  “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.


 


9

















 


•                  “Rule 415” means
Rule 415 promulgated under the Securities Act, or any successor rule, and
applicable rules and regulations thereunder.


 


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


 


•                  “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 Third Amended and Restated
Loan and Security Agreement, dated August 15, 2007, among the Company, Bank of
America, N.A., as administrative agent, Bank of America Securities, LLC, as the
lead arranger, Foothill Capital Corporation, 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 such
agreement may be amended from time to time.


 


ARTICLE X

GOVERNING LAW; MISCELLANEOUS


 


10.1         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.


 


10.2         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.


 


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


 


10.4         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.


 


10.5         Entire Agreement. This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the parties hereto
with respect to the subject matter hereof.


 


10.6         Consents;
Waivers and Amendments. Except as otherwise specifically provided herein,
in each case in which approval of the Investors 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 Shares, which
consent shall bind the holders of all of the outstanding Shares.


 


10.7         Changes,
Waivers, etc. Except as provided in Section 10.6, neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated
orally, but only by a statement in 


 


10

















 


writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.


 


10.8         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
  55101

  
	
   

  	
  Attn: Chief Financial
  Officer

  
	
   

  	
  Facsimile: (651) 325-2001

  
	
   

  	
   

  
	
  and

  	
  180
  East Fifth Street, Suite 1300

  
	
   

  	
  Saint Paul, Minnesota
  55101

  
	
   

  	
  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 Investor:  To the address set forth
immediately below such Investor’s name on the signature pages hereto.


 


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


 


10.9         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
Investors, and no Investor may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Company. This
provision does not limit the Investor’s right to transfer the Shares pursuant
to the terms of this Agreement or to assign the Investor’s rights hereunder to
any such transferee pursuant to the terms of this Agreement.


 


10.10       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.


 


10.11       Survival. All representations and
warranties contained herein shall survive the execution and delivery of this
Agreement, any investigation at any time made by the Investors or on their
behalf, and the sale and purchase of the Common Stock 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.


 


10.12       Publicity. The Company and each
Investor 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 


 


11

















 


Company may make any press release or SEC or Nasdaq filings with
respect to such transactions as are required by applicable law and regulations
(including NASD requirements) without the prior approval of the Investors
(although the Company will make reasonable efforts to consult with the
Investors in connection with any such press release prior to its release and
filing).


 


10.13       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.


 


10.14       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.


 


10.15       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.


 


10.16       Independent Nature of Investors’ Obligations
and Rights. The obligations of each Investor under this Agreement are
several and not joint with the obligations of any other Investor, and no
Investor shall be responsible in any way for the performance of the obligations
of any other Investor under this Agreement. Nothing contained herein, and no
action taken by any Investor pursuant hereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Each Investor 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 Investor to be joined as an additional party in any proceeding for such
purpose. Each Investor has been represented by its own separate legal counsel
in its review and negotiation of this Agreement. The Company has elected to
provide all Investors with the same terms for the convenience of the Company
and not because it was required or requested to do so by the Investors.


 


10.17       Trusts and Other Entity Investors.
To the extent any holder of Securities 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 Common Stock held by such trust or other entity. Each Investor
agrees that it will cause such persons to execute and deliver to the Company an
acknowledgement of the obligations set forth in this SECTION 10.17 to the extent reasonably requested by the
Company.


 


ARTICLE XI

REGISTRATION RIGHTS


 


11.1         Mandatory Registration. The
Company will use its best efforts to file with the SEC a Registration Statement
on Form S-3 registering the Registrable Securities for resale within 365  days after the Closing Date. If Form S-3 is not available
at that time, then the Company will use its best efforts to file a Registration
Statement on such form as is then available to effect a registration of the
Registrable Securities within such 365-day period.


 


11.2         Effectiveness of the Registration
Statement.


 


(a)           The Company will use its best efforts
to cause the Registration Statement contemplated by SECTION 11.1 to be declared effective by the SEC as soon as
practicable after filing, and 


 


12

















 


in any event no later than the 420th day after the Closing date;
provided, that in the event the SEC performs a full review of the Registration
Statement, the Company will use its best efforts to cause the Registration
Statement to be declared effective by the SEC as soon as practicable after
filing, and in any event no later than the 480th day after the Closing Date
(the “Required Effective Date”). If the SEC
takes the position that registration of the resale of the Registrable
Securities by the Investors is not available under applicable laws, rules and
regulation and that the Company must register the offering of the Registrable
Securities as a primary offering by the Company, the Company will file a
Registration Statement as a primary offering and will use its best efforts to
cause the Registration Statement to be declared effective by the SEC as soon as
practicable after filing.


 


(b)           The Company’s best efforts will
include, but not be limited to, promptly responding to all comments received
from the staff of the SEC.


 


(c)           In the event the Registration
Statement contemplated by SECTION
11.1 is not declared effective by the Required Effective Date, the Company
shall continue to use its best efforts to diligently pursue the effectiveness
of the Registration Statement.


 


(d)           Once the Registration Statement is
declared effective by the SEC, the Company will cause the Registration
Statement to remain effective throughout the Registration Period, except as
permitted under SECTION 11.3.


 


11.3         Continued Effectiveness of Registration
Statement. The Company will keep the Registration Statement covering the
Registrable Securities effective under Rule 415 at all times during the
Registration Period. In the event that the number of shares available under a
Registration Statement filed pursuant to this Agreement is insufficient to
cover all of the Registrable Securities, the Company will (if permitted) amend
the Registration Statement or file a new Registration Statement, or both, so as
to cover all of the Registrable Securities. The Company will file such
amendment or new Registration Statement as soon as practicable, but in no event
later than 30 business days after the necessity therefor arises (based upon the
market price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely). The Company will use its best efforts to cause such
amendment or new Registration Statement to become effective as soon as is
practicable after the filing thereof, but in no event later than 120 days after
the date on which the Company reasonably first determines (or reasonably should
have determined) the need therefor.


 


11.4         Accuracy of Registration Statement.
Any Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) filed by the Company covering Registrable
Securities will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading. The Company will promptly prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to permit sales pursuant to the
Registration Statement at all times during the Registration Period, and, during
such period, will comply with the provisions of the Securities Act with respect  to the disposition of all Registrable Securities of the
Company covered by the Registration Statement until the termination of the
Registration Period, or if earlier, until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement.


 


11.5         Furnishing Documentation. The
Company will furnish to each Investor whose Registrable Securities are included
in a Registration Statement, (a) promptly after each document is prepared
and publicly distributed, filed with the SEC or received by the Company, one
copy of any Registration Statement filed pursuant to this Agreement and any
amendments thereto, each preliminary prospectus and final prospectus and each
amendment or supplement thereto; and (b) a number of copies 


 


13

















 


of a prospectus, including a preliminary prospectus (if any), and all
amendments and supplements thereto, and such other documents as the Investor
may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by the Investor. The Company will promptly notify
each Investor whose Registrable Securities are included in any Registration
Statement of the effectiveness of the Registration Statement and any
post-effective amendment.


 


11.6         Additional Obligations. The
Company will use its best efforts to (a) register and qualify the
Registrable Securities covered by a Registration Statement under such other
securities or blue sky laws of such jurisdictions as each Investor who holds
(or has the right to hold) Registrable Securities being offered reasonably
requests, (b) prepare and file in those jurisdictions any amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain their effectiveness during the
Registration Period, (c) take any other actions necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (d) take any other actions reasonably necessary or advisable
to qualify the Registrable Securities for sale in such jurisdictions. Notwithstanding
the foregoing, the Company is not required, in connection with such
obligations, to (i) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this SECTION 11.6, (ii) subject itself to general
taxation in any such jurisdiction, (iii) file a general consent to service
of process in any such jurisdiction, (iv) provide any undertakings that
cause material expense or burden to the Company, or (v) make any change in
its charter or bylaws, which in each case the board of directors of the Company
determines to be contrary to the best interests of the Company and its
shareholders.


 


11.7         Underwritten Offerings.


 


(a)           If Investors holding a majority in
interest of the Registrable Securities being registered determine to engage the
services of an underwriter reasonably acceptable to the Company, the Company
and each Investor will enter into and perform their respective obligations
under an underwriting agreement, in usual and customary form, including,
without limitation, customary indemnification and contribution obligations,
with the managing underwriter of such offering, and will take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of its Registrable
Securities from such Registration Statement.


 


(b)           Without limiting any Investor’s
rights under SECTION 11.1, no
Investor may participate in any underwritten distribution hereunder unless such
Investor (a) agrees to sell such Investor’s Registrable Securities on the
basis provided in any underwriting arrangements approved by the Investors
entitled hereunder to approve such arrangements, (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (c) agrees to pay its pro rata share of all
underwriting discounts and commissions and other fees and expenses of
investment bankers and any manager or managers of such underwriting, and legal
expenses of the underwriter, applicable with respect to its Registrable
Securities, in each case to the extent not payable by the Company under the
terms of this Agreement.


 


11.8                           Suspension of Registration.


 


(a)           The Company will notify each
Investor, which notice (including the fact of such notice and the content
thereof) each Investor agrees to treat in confidence and not to disclose, who
holds Registrable Securities being sold pursuant to a Registration Statement of
the happening of any event of which the Company has knowledge as a result of
which the prospectus included in the Registration Statement as then in effect
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Company will make such notification as promptly as 


 


14

















 


practicable after the Company becomes aware of the event, will promptly
prepare a supplement or amendment to the Registration Statement to correct such
untrue statement or omission, and will deliver a number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request. The Company will use its best efforts to keep the length of any such
suspension to as short a period as is practicable given the then existing
circumstances and may so defer or suspend the use of the Registration Statement
no more than two  times in any 18-month  period, and provided, further, that, after deferring or
suspending the use of the Registration Statement, the Company may not again
defer or suspend the use of the Registration Statement until a period of thirty  days has elapsed after resumption of the use of the
Registration Statement. Notwithstanding anything to the contrary contained
herein, if the use of the Registration Statement is suspended by the Company,
the Company will promptly give notice of the suspension to all Investors whose
securities are covered by the Registration Statement, and will promptly notify
each such Investor as soon as the use of the Registration Statement may be
resumed. Notwithstanding anything to the contrary contained herein, the Company
will cause the Transfer Agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of this Agreement in
connection with any sale of Registrable Securities with respect to which such
Investor has entered into a contract for sale prior to receipt of notice of
such suspension and for which such Investor has not yet settled.


 


(b)           Subject to the Company’s rights under
SECTION 1.3, the Company will use
its best efforts to prevent the issuance of any stop order or other suspension
of effectiveness of a Registration Statement and, if such an order is issued,
will use its best efforts to obtain the withdrawal of such order at the
earliest possible time.


 


11.9         Information. The Company will
make generally available to its security holders as soon as practicable, but
not later than 90 days after the close of the period covered thereby, an
earnings statement (in a form complying with the provisions of Rule 158
under the Securities Act) covering a 12-month period beginning not later than
the first day of the Company’s fiscal quarter next following the effective date
of the Registration Statement.


 


11.10       Comfort Letter; Legal Opinion. At
the request of the Investors who hold a majority in interest of the Registrable
Securities being sold pursuant to a Registration Statement, and on the date
that Registrable Securities are delivered to an underwriter for sale in
connection with the Registration Statement, the Company will furnish to the
Investors and the underwriters  (i) a
letter, dated such date, from the Company’s independent registered public
accounting firm, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters; and (ii) an opinion, dated such
date, from counsel representing the Company for purposes of the Registration
Statement, in form and substance as is customarily given in an underwritten
public offering, addressed to the underwriters and Investors.


 


11.11       Due Diligence; Confidentiality.


 


(a)           The Company will make available for
inspection by any Investor whose Registrable Securities are being sold pursuant
to a Registration Statement, any underwriter participating in any disposition
pursuant to the Registration Statement, and any attorney, accountant or other
agent retained by any such Investor or underwriter (at any time, any Investor
or underwriter and any attorney, accountant or other agent retained by any such
Investor or underwriter, collectively, the “Inspectors”),  all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the “Records”),  as each
Inspector reasonably deems reasonably necessary to enable the Inspector to
exercise its due diligence responsibility in connection with or related to the
contemplated offering. The Company will cause its officers, directors and
employees to supply all information that any Inspector may reasonably request
for purposes of performing such due diligence. The Records shall also include
any information provided by the Company or any of its attorneys, accountants or
other agents 


 


15

















 


from time to time to any of the Inspectors, regardless of whether such
information is provided in connection with a contemplated offering of
Registrable Securities.


 


(b)           Each Inspector will hold in
confidence, and will not make any disclosure (except to an Investor) of, any
Records or other information that the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (ii) the release
of such Records is ordered pursuant to a subpoena or other order from a court
or government body of competent jurisdiction, (iii) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement (to the knowledge of the
relevant Inspector), (iv) the Records or other information was developed
independently by an Inspector without breach of this Agreement, (v) the
information was known to the Inspector before receipt of such information from
the Company, or (vi) the information was disclosed to the Inspector by a
third party not under an obligation of confidentiality. The Company is not
required to disclose any confidential information in the Records to any
Inspector unless and until such Inspector has entered into a confidentiality
agreement (in form and substance satisfactory to the Company) with the Company
with respect thereto, substantially in the form of this SECTION 11.11. Each Investor will, upon learning that
disclosure of Records containing confidential information is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at the Company’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, the Records deemed confidential. Nothing herein will be
deemed to limit the Investor’s ability to sell Registrable Securities in a
manner that is otherwise consistent with applicable laws and regulations.


 


(c)           The Company will hold in confidence,
and will not make any disclosure of, information concerning an Investor
provided to the Company under this Agreement unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, or
any exchange listing or similar rules and regulations, (ii) the disclosure
of such information is necessary to avoid or correct a misstatement or omission
in any Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other order from a court or governmental body
of competent jurisdiction, (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement
or any other agreement or (v) such Investor consents to the form and content of
any such disclosure. If the Company learns that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, the Company will give prompt notice
to such Investor prior to making such disclosure and allow such Investor, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.


 


11.12       Listing. The Company will cause
all of the Registrable Securities covered by each Registration Statement to be
listed on each national securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if the listing
of such Registrable Securities is then permitted under the rules of such
exchange.


 


11.13       Transfer Agent; Registrar. The
Company will provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement.


 


11.14       Share Certificates. The Company
will cooperate with the Investors who hold Registrable Securities being sold
and with the managing underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be offered pursuant to a Registration
Statement and will enable such certificates to be in such denominations 


 


16

















 


or amounts as the case may be, and registered in such names as the
Investors or the managing underwriter(s), if any, may reasonably request, all
in accordance with ARTICLE V
of this Agreement.


 


11.15       Plan of Distribution. At the
request of an Investor holding an interest of the Registrable Securities
registered pursuant to a Registration Statement, the Company will promptly
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement, and the prospectus
used in connection with the Registration Statement, as may be necessary in
order to change the plan of distribution set forth in such Registration
Statement.


 


11.16       Securities Laws Compliance. The
Company will comply with all applicable laws related to any Registration Statement
relating to the sale of Registrable Securities and to offering and sale of
securities and with all applicable rules and regulations of governmental
authorities in connection therewith (including, without limitation, the
Securities Act, the Exchange Act and the rules and regulations promulgated by
the SEC).


 


11.17       Investor Information. As a
condition to the obligations of the Company to complete any registration
pursuant to this Agreement with respect to the Registrable Securities of each
Investor, such Investor will furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as is reasonably required
by the Company to effect the registration of the Registrable Securities. At
least ten business days prior to the first anticipated filing date of a
Registration Statement for any registration under this Agreement, the Company
will notify each Investor of the information the Company requires from that
Investor if the Investor elects to have any of its Registrable Securities
included in the Registration Statement. If, within three business days prior to
the filing date, the Company has not received the requested information from an
Investor, then the Company may file the Registration Statement without
including Registrable Securities of that Investor.


 


11.18       Further Assurances. Each Investor
will cooperate with the Company, as reasonably requested by the Company, in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from the Registration Statement.


 


11.19       Suspension of Sales. Upon receipt
of any notice from the Company of the happening of any event of the kind
described in SECTION 11.8,
each Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until (i) it receives copies of a supplemented or amended prospectus
contemplated by SECTION 11.8
or (ii) the Company advises the Investor that a suspension of sales under SECTION 9.8 has terminated. If so
directed by the Company, each Investor will deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’s possession (other than a limited
number of file copies) of the prospectus covering such Registrable Securities
that is current at the time of receipt of such notice.


 


11.20       Conflicting Instructions. A person
or entity is deemed to be a holder of Registrable Securities whenever such
person or entity owns of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable Securities, the
Company will act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.


 


11.21       Registration Expenses. The Company
will bear all reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to SECTION
11.1, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, the fees and disbursements
of counsel for the Company, and the reasonable fees and disbursements of each
Investor’s legal counsel to review the Registration 


 


17

















 


Statement (subject to the aggregate $15,000 limit set forth in SECTION 4.3) and all amendments and
supplements thereto.


 


11.22       Indemnification for Registration. Notwithstanding
ARTICLE VIII of this Agreement, in
the event that any Registrable Securities are included in a Registration
Statement under this Agreement:


 


(a)           To the extent permitted by law, the
Company will indemnify and hold harmless each Investor that holds such
Registrable Securities, any underwriter (as defined in the Securities Act) for
the Investors, any directors, officers or advisors of such Investor or such
underwriter and any person who controls such Investor or such underwriter
within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”)  against any
losses, claims, damages, expenses or liabilities (joint or several)
(collectively, and together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened in
respect thereof, “Claims”) to which any of them
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such Claims arise out of or are based upon any of the following statements,
omissions or violations in a Registration Statement filed pursuant to this
Agreement, any post-effective amendment thereof or any prospectus included
therein:  (a) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (b) any untrue
statement or alleged untrue statement of a material fact contained in the
prospectus (as it may be amended or supplemented) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (c) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act or any other law, including
without limitation any state securities law or any rule or regulation
thereunder (the matters in the foregoing clauses (a) through (c) being,
collectively, “Violations”). Subject to the
restrictions set forth in SECTION 11.22(c)
with respect to the number of legal counsel, the Company will reimburse the
Investors and each such underwriter or controlling person and each such other
Indemnified Person, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any Claim. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in
this SECTION 11.22(a)
(i) does not apply to Claims arising out of or based upon a Violation that
occurs in reliance upon and in conformity with information furnished in writing
to the Company by an Indemnified Person expressly for use in connection with
the preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to this Agreement; and (ii) does not apply to amounts paid in
settlement of any Claim if such settlement is made without the prior written
consent of the Company, which consent will not be unreasonably withheld. This
indemnity obligation will remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Persons and will survive
the transfer of the Registrable Securities by the Investors under this
Agreement.


 


(b)           In connection with any Registration
Statement in which an Investor is participating, each such Investor will
indemnify and hold harmless, to the same extent and in the same manner set
forth in SECTION 11.22(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, and any other
shareholder selling securities pursuant to the Registration Statement and any
of its directors and officers and any person who controls such shareholder
within the meaning of the Securities Act or the Exchange Act (each an “Indemnified  Person”)
against any Claim to which any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity 


 


18

















 


with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement. Subject to
the restrictions set forth in SECTION 11.22(c),
such Investor will promptly reimburse the Company and each such other
Indemnified Person, any legal or other expenses (promptly as such expenses are
incurred and due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim. However, the indemnity agreement
contained in this SECTION 11.22(b)
does not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent will
not be unreasonably withheld, and no Investor will be liable under this
Agreement (including this SECTION 11.22(b))
for the amount of any Claim that exceeds the net proceeds actually received by
such Investor as a result of the sale of Registrable Securities pursuant to
such Registration Statement. This indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified
Party and will survive the transfer of the Registrable Securities by the
Investors under this Agreement.


 


(c)           Promptly after receipt by an
Indemnified Person under this SECTION
11.22 of notice of the commencement of any action (including any governmental
action), such Indemnified Person will, if a Claim in respect thereof is to be
made against any indemnifying party under this SECTION
11.22, deliver to the indemnifying party a written notice of the
commencement thereof. The indemnifying party may participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly given notice, assume control of the defense thereof with
counsel mutually satisfactory to the indemnifying parties and the Indemnified
Person. In that case, the indemnifying party will diligently pursue such
defense. If, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person and the
indemnifying party would be inappropriate due to actual or potential conflicts
of interest between the Indemnified Person and any other party represented by
such counsel in such proceeding or the actual or potential defendants in, or
targets of, any such action including the Indemnified Person, and such
Indemnified Person reasonably determines that there may be legal defenses
available to such Indemnified Person that are different from or in addition to
those available to the indemnifying party, then the Indemnified Person is
entitled to assume such defense and may retain its own counsel, with the fees
and expenses to be paid by the indemnifying party (subject to the restrictions
on settlement under SECTION
11.22(a) or SECTION 11.22(b),
as applicable). The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action does not
relieve an indemnifying party of any liability to an Indemnified Person under
this SECTION 11.22, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action. The indemnification required by this SECTION 11.22
will be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable. Each Indemnified Person shall furnish such
information regarding itself or the claim in question as an Indemnifying Person
may reasonably request in writing and shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.


 


11.23       Contribution. To the extent that
any indemnification provided for under SECTION
11.22 is prohibited or limited by law, the indemnifying party will make the
maximum contribution with respect to any amounts for which it would otherwise
be liable under SECTION 11.22 to
the fullest extent permitted by law. However, (a) no contribution will be
made under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in SECTION 11.22, (b) no seller of Registrable Securities
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from
any seller of Registrable Securities who was not guilty of such fraudulent
misrepresentation, and (c) contribution (together with any indemnification
or other obligations under this Agreement) by any seller of Registrable
Securities will be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.


 


19

















 


11.24       Assignment of Registration Rights.
The rights of the Investors under this ARTICLE
XI, including the right to have the Company register Registrable Securities
pursuant to this Agreement, will be automatically assigned by the Investors to
transferees or assignees of all or any portion of the Registrable Securities,
but only if (a) the Investor agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to the Company
within two business days after such assignment, (b) the Company is, within
two business days after such transfer or assignment, furnished with written
notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being transferred
or assigned, (c) after such transfer or assignment, the further
disposition of such securities by the transferee or assignee is restricted
under the Securities Act and applicable state securities laws, (d) at or
before the time the Company received the written notice contemplated by
clause (b) of this sentence, the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein, (e)
such transfer is made in accordance with the applicable requirements of this
Agreement and (f) the transferee is an “accredited investor”  as that term is defined in Rule 501 of Regulation D. Any
transferee or assignee of an Investor under this ARTICLE XI shall be deemed an “Investor” for all purposes of
this Agreement, and shall be entitled to all rights of, and subject to all
obligations (including indemnification obligations) of, an Investor hereunder.


 


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


 


20

















 


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


 


COMPANY:


 


	
  GANDER
  MOUNTAIN COMPANY 

  a Minnesota
  corporation  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Eric R. Jacobsen  

  	
   

  	
   

  
	
   

  	
  Eric
  R. Jacobsen  

  Senior Vice President
  and General Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INVESTOR:
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRATCO
  LLC 

  a Missouri limited
  liability company 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  David C. Pratt  

  	
   

  
	
   

  	
   

  	
  David
  C. Pratt  

  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Shares
  of Common Stock: 3,065,000  

  Tax ID No: 20-8005136 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ADDRESS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRATCO
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (any
  notice hereunder to this Investor shall include 

  a copy to):  

  
	
   

  	
   

  
	
   

  	
  Mark
  R. Gale, Esq.

  
					



 

















 


EXHIBIT A

TO STOCK PURCHASE 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 Purchase Agreement.


 


3.        The authorized capital stock of the Company consists of
105,000,000 shares, par value $0.01 per share, of which 100,000,000 are
designated as common shares, and 5,000,000 are undesignated.


 


4.        No shareholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe
for or purchase the Common Stock to be issued under the Purchase Agreement
arising (i) by operation of the charter or by-laws of the Company or the
Minnesota Business Corporation Act or (ii) to our knowledge, otherwise.


 


5.        The Purchase Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
in accordance with its 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.


 


6.        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 Purchase 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.


 


7.        The execution
and delivery of the Purchase Agreement by the Company and the performance by
the Company of its obligations thereunder (i) will not result in any violation
of the provisions of the charter or bylaws of the Company; or (ii) to our
knowledge, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company.


 


8.        The
Company’s common stock to be issued under the Purchase Agreement has been duly
authorized and when those securities are issued and paid for in accordance with
the terms of the Purchase Agreement, such securities will be validly issued,
fully paid and non-assessable.


 


9.        The
Company has received all consents and waivers required under that certain
Registration Rights Agreement dated as of March 11, 2004 by and among the
Company, Holiday Stationstores, Inc., and the other investors named therein and
that certain Fourth Amended and Restated Loan and Security Agreement, dated
December 6, 2007, among the Company and its subsidiaries, Bank of America,
N.A., as administrative agent, Bank of America Securities, LLC, as the lead
arranger, Foothill Capital Corporation, 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 amended
through December 6, 2007 for the consummation of the transactions contemplated
by the Purchase Agreement.


 


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