Exhibit 10.3


STOCK PURCHASE AGREEMENT

(HOLIDAY STATIONSTORES, INC.)


 


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 $5,916,502.30.


 


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shall be rescinded as to such number of Shares as is required to comply with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,
immediately following the closing of the purchase of shares of common stock of
the Company by GRATCO LLC, 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 


 


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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 


 


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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.


 


11.25       Waiver Under Prior Registration Rights Agreement.  The
undersigned Investor, Holiday Stationstores, Inc., a Minnesota corporation (“Holiday”), is a party to that certain Registration Rights
Agreement dated as of March 11, 2004 (the “Registration
Rights Agreement”) by and among the Company and the shareholders of
the Company named therein (the “Prior Registration Rights
Holders”).  Holiday,
representing a Majority of Investors (as defined under the Registration Rights
Agreement) (a) hereby consents to the granting of registration rights pursuant
to this Agreement and the Stock Purchase Agreement dated on or about the date
hereof by and among the Company and the purchasers named therein (collectively,
the “Stock Purchase Agreements”), (b) agrees
that the registration rights granted to the Prior Registration Rights Holders
pursuant to the Registration Rights Agreement shall be subordinate to the
registration rights granted pursuant to the Stock Purchase Agreements, and (c)
waives any rights of the Prior Registration Rights Holders to include
Registrable Shares (as defined under the Registration Rights Agreement) in any
registration statements filed by the Company in order to comply with the terms
of the Stock Purchase Agreements unless the Investors under the Stock Purchase
Agreements consent to such inclusion. 
Except to the extent specifically waived by this SECTION 11.25, the rights of the Prior Registration
Rights Holders shall be unaffected hereby and the Registration Rights Agreement
shall remain in full force and effect.


 


[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:
  

  
	
   

  	
   

  
	
   

  	
  HOLIDAY
  STATIONSTORES, INC. 

  a Minnesota
  corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lynn M. Anderson

  	
   

  
	
   

  	
   

  	
  Lynn
  M. Anderson 

  Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Shares
  of Common Stock:  1,002,797 

  
	
   

  	
  Tax
  ID No:

  	
  41-0880942
  

  	
   

  
	
   

  	
   

  
	
   

  	
  ADDRESS:
  

  
	
   

  	
   

  
	
   

  	
   

  	
  4567 American Boulevard West 

  	
   

  
	
   

  	
   

  	
  Minneapolis, Minnesota 55437 

  	
   

  
	
   

  	
   

  	
  Attention:  President
  

  	
   

  
	
   

  	
   

  
	
   

  	
  (any
  notice hereunder to this Investor shall include 

  a copy to): 

  
	
   

  	
   

  
	
   

  	
   

  	
  4567 American Boulevard West 

  	
   

  
	
   

  	
   

  	
  Minneapolis, Minnesota 55437 

  	
   

  
	
   

  	
   

  	
  Attention:  Legal
  Department

  	
   

  
									



 

















 


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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