Prepared by MERRILL CORPORATION









Exhibit 10.46




 




 




CAPITAL NOTE




AGRP HOLDING CORP.




 




 




Dated:                  December

5, 2001




$14,477,419




 




 




AGRP HOLDING

CORP. (the “Company”) promises to pay to Affinity Group Thrift Holding Corp., a

Delaware corporation, or assigns (the “Payee”) the principal sum of Fourteen

Million Four Hundred Seventy-Seven Thousand Four Hundred Nineteen and 00/100

Dollars ($14,477,419).




 




1.                Interest.  The Payee shall be entitled to receive

interest from the date hereof at the rate of eleven percent (11%) per annum on

the principal amount of this Note outstanding from time to time.  Interest shall be paid at such times as

declared by the board of directors of the Company.  Interest not paid shall accumulate and shall be compounded

annually until paid.  All interest

accumulated under this section shall be paid in full before any distribution is

paid or declared to any member of the Company. 

If not earlier paid, all accrued and theretofore unpaid interest shall

be paid on the Maturity Date.  The

Company shall pay interest on overdue principal and on overdue interest (to the

full extent permitted by law) at a rate equal to fifteen percent (15%) per

annum.




 




2.                Principal.  The Payee shall be entitled to receive the

principal amount of this Note on the Maturity Date.




 




3.                Liquidation Preference.  In the event of any voluntary dissolution,

liquidation, partial liquidation or winding up of the Company, after due

payment or provision for payment of the other debts and other liabilities of

the Company, the Payee shall be entitled to receive from the net assets an

amount (the “Liquidation Payment”) equal to interest accumulated and unpaid

pursuant to Section 1 above plus the principal amount hereof, before any

distribution shall be made to any member of the Company.




 




4.                Pre-payment.




 




                A.                Voluntary Pre-payment.  The Company shall have the option of

prepaying this Note in whole or in part at any time and from time to time

without penalty or premium.  All

payments shall be applied first to accrued interest and then to principal

balances.




 




                B.                Mandatory Pre-payment. To

the extent of the Net Proceeds thereof, the Company shall prepay the principal

balance of this Note contemporaneously with the closing of a transaction

described in clause (iii), (iv) or (v) of the definition of Asset Sale. The

Company shall prepay the entire principal balance of this Note

contemporaneously with the occurrence of an event described in clauses (i) or

(ii) of the definition of Asset Sale. 

Prepayments shall be applied in inverse order of maturity.




 













 




5.                Defaults and Remedies.  An "Event of Default" occurs if:




 




      (a)   the

Company defaults in the payment of any principal, interest or premium, if any,

on the Note when the same becomes due and payable, or otherwise fails to comply

with any other provision of this Note and such default is not cured within five

business days after the occurrence thereof.




 




                (b)                the Company, pursuant to Title

11 of the U.S. Code or any similar federal or state law for the relief of

debtors as the same may be amended from time to time, (i) commences a voluntary

case or proceeding, (ii) consents to the entry of an order for relief against

it in an involuntary case or proceeding, (iii) consents to the appointment of a

receiver, trustee, assignee, liquidator, sequestrator or similar official

charged with maintaining possession or control over property for one or more

creditors, (iv) makes a general assignment for the benefit of its creditors, or

(v) generally does not pay its debts when such debts become due or admits in

writing its inability to pay its debts generally.




 




      If an Event of Default specified in

subparagraph (a) above occurs and is continuing, then the Payee may declare the

principal of and interest on the Note to be due and payable immediately.  If an Event of Default specified in

subparagraph (b) above occurs and is continuing, the principal of, and premium,

if any, and interest on the Note shall ipso facto become and be immediately due

and payable without any declaration or other act on the part of the Payee.  No course of dealing on the part of the Payee

nor any delay or failure on the part of the Payee to exercise any right shall

operate as a waiver of such right or otherwise prejudice the Payee’s rights,

powers and remedies.  If an Event of

Default occurs, the Company will pay to the Payee all costs and expenses,

including but not limited to reasonable attorneys' fees, incurred by the Payee

in collecting any sums due on this Note or in otherwise enforcing any of the

Payee’s rights, powers and remedies.




 




6.                Seniority.  The indebtedness evidenced by this Note,

including all principal, interest, premium, fees, costs and expenses payable by

the Company hereunder, shall be expressly junior and subordinate in right of

payment to any indebtedness of the Company for borrowed money which is

designated as senior indebtedness, whether secured or unsecured (the

"Senior Debt").  No payment of

principal of or interest on this Note shall be made if the Company is in

default, or such payment would result in a default, with respect to the Senior

Debt.  Upon any distribution of assets

of the Company, upon dissolution, winding-up, liquidation or reorganization of

the Company, whether in bankruptcy, insolvency or receivership proceedings, or

upon an assignment for the benefit of creditors, or any other marshalling of

the assets and liabilities of the Company, or otherwise, Senior Debt shall

first be paid in full, or provision made for such payment, in cash, before any

payment is made on account of the principal of and interest on this Note.













 




7.                Miscellaneous.




 




As used herein,

the following terms shall have the meanings given to them hereinbelow:




 




                “Maturity Date” means the tenth anniversary

of the date thereof or such earlier date on which the principal balance of this

Note shall become due and payable by the terms hereof, by acceleration or

otherwise.




 




                “Asset Sale” means:  (i) a voluntary or involuntary dissolution or winding up of the

Company; (ii) any capital reorganization or reclassification of the equity

interests of the Company or consolidation or merger of the Company with or into

another entity; (iii) a sale of any of the real property scheduled on Exhibits

A-1 through A-11 to that certain real estate purchase agreement dated as of

November 1, 2001 made between the Company, as buyer, and Affinity Group, Inc.,

as seller, (the “Real Property”) or the sale of shares of stock of any

subsidiary of the Company holding any Real Property (a “Real Estate Sub”) to an

unaffiliated entity; (iv) if theretofore transferred to an affiliate, (a) a

sale of any Real Property (or the shares of a Real Estate Sub) by such

affiliate to an unaffiliated entity, (b) a capital reorganization or

reclassification of the ownership of such affiliate, (c) the consolidation or

merger of such affiliate with or into another entity, (d) a distribution by

such affiliate including, without limitation, a distribution of any Real

Property, or (e) a voluntary or involuntary dissolution or winding up of such

affiliate; or (v) the declaration by the Company of any distribution, by

dividend or otherwise, of any Real Property or of a Real Estate Sub.




 




                                “Net

Proceeds” means the net amount of cash available to the Company from an Asset

Sale after the payment of all expenses incurred in connection with the Asset

Sale and after the making of such deposits, escrows or other payments as may be

required in connection with any indebtedness to which the Real Property is

subject.




 




                This Note is a contract made under the laws

of the state of California and the rights and obligations of the Company and

the Payee shall be construed, interpreted and enforced under the laws of such

state.




 




                This Note has not been registered under the

Securities Act of 1933, as amended, or the securities laws of the State of

California, or any other state.  This

note may not be sold, transferred or otherwise disposed of except pursuant to

an effective registration statement or appropriate exemption from registration

under the foregoing laws.  Accordingly,

this Note may not be sold, transferred or otherwise disposed of without (i) the

opinion of counsel satisfactory to the Company that such transfer may lawfully

be made without registration under the Federal Securities Act of 1933 and the

securities laws of the State of California or any other applicable state

securities laws; or (ii) such registration. 

This legend represents a restriction on transferability of this Note.













 




                IN WITNESS WHEREOF, the Company has caused this Note

to be duly executed as of the date first written above.




 




	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AGRP HOLDING CORP.


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  By:


  	

  /s/


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  Name:


  	

  Mark J. Boggess


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  Title:


  	

  Senior Vice President