Document:

Exhibit 10.42

 

FIRST AMENDMENT AND LIMITED WAIVER TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS
FIRST AMENDMENT AND LIMITED WAIVER TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT (the “Amendment”)
is entered into as of August 12, 2010 by and among AFFINITY GROUP, INC.,
a Delaware Corporation (the “Borrower”),
as a Borrower and as a Credit Party, the CREDIT PARTIES party hereto (each a “Credit Party” and, collectively,
the “Credit Parties”), the LENDERS party
hereto (each a “Lender”
and, collectively, the “Lenders”)
and WILMINGTON TRUST FSB, as administrative agent for the Lenders (the “Agent”).

 

A.            WHEREAS, Agent, Lenders and Credit
Parties are parties to that certain Second Amended and Restated Credit
Agreement dated as of March 1, 2010 (as heretofore and hereafter amended,
supplemented, modified and/or restated from time to time, the “Credit Agreement”), pursuant to
which the Lenders made/make Loans to the Borrower;

 

B.            WHEREAS, the Credit Parties have
requested that Agent and Lenders agree to modify certain terms of the Credit
Agreement; and

 

C.            WHEREAS, the Agent and Lenders have
agreed to the foregoing requests, subject in all respects to the terms and
conditions set forth in this Amendment.

 

NOW,
THEREFORE, in consideration of the terms and conditions, premises and the other
mutual covenants contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

 

SECTION 1.        Accuracy
of Recitals; Definitions.  The Credit Parties, the Agent and Lenders
acknowledge and agree that the foregoing Recitals are accurate and complete and
are incorporated herein by reference. 
All capitalized terms used but not otherwise defined in this Amendment
shall have the meanings given such terms in the Credit Agreement.

 

SECTION 2.        Limited
Waiver.

 

Pursuant
to the request of the Credit Parties, Agent and Lenders hereby waive any
Default or Event of Default that may have occurred under Section 7.16
of the Credit Agreement subsequent to the Effective Date based on the existence
of the Phantom Stock Accruals, provided, however, that: (i) this
limited waiver is and shall be effective solely for the specific instance and
purpose described herein and is not and shall not be applicable to any other
Default or Event of Default whether now existing or hereafter occurring or to
any other provision of the Credit Agreement or other Loan Documents; and (ii) all
of the conditions precedent set forth in Section 4 (Conditions
Precedent) of this Amendment have been satisfied.

 

1

 

SECTION 3.        Amendments
to Credit Agreement.  The Credit
Parties, the Agent and the Lenders agree that the Credit Agreement is hereby
amended as follows:

 

(a)           Section 1.1 of the Credit
Agreement (Defined Terms) is hereby amended as follows:

 

(i)            to delete the
definition of “Consolidated Fixed Charges Ratio” set forth therein and
to replace it with the following -

 

“Consolidated
Fixed Charges Ratio” means, as at any date, commencing with the fiscal
quarter ending June 30, 2010, the ratio of (a) the total of
(i) EBITDA for the period of four consecutive fiscal quarters ending on or
most recently ended prior to such date minus (ii) the aggregate amount of
all Capital Expenditures made during such period to (b)  the sum for the
Credit Parties (determined on a consolidated basis without duplication in
accordance with GAAP) of the following: 
(i) Cash Interest Expense for such period, plus (ii) all
regularly scheduled payments of principal on any Indebtedness (including the
Term Loans and the principal component of any payments in respect of Capital
Lease Obligations for such period, plus (iii) the aggregate amount paid,
or required to be paid (without duplication as between fiscal periods), in cash
in respect of income, franchise and other like taxes (excluding real estate
taxes) for such period (to the extent not deducted in determining EBITDA for
such period) (but excluding any accrued tax liability not paid in cash
resulting from the election by the Borrower to be treated as an “S Corporation”
under the Code or from the election by the Borrower to treat any of the
Guarantors as “Qualified Subchapter S Subsidiaries” under the Code) plus
(iv) Permitted Tax Distributions to the extent paid in cash during such
period plus (v) any payments in respect of deferred compensation to the
extent paid in cash or Cash Equivalents during such period plus (vi) any
payments in respect of Phantom Stock Agreements to the extent paid in cash or
Cash Equivalents during such period; provided, however, that the
Consolidated Fixed Charges Ratio for any period prior to the Effective Date
shall be determined on a pro forma basis.

 

(ii)           to delete the
definition of “EBITDA” set forth therein in its entirety and to replace
it with the following -

 

“EBITDA”
means, for any period, operating income for the Credit Parties (determined on a
consolidated basis without duplication in accordance with GAAP) for such period
plus (to the extent deducted in computing operating income) income, franchise
and other like taxes (excluding real estate taxes) expensed during such period,
interest, depreciation, amortization and other write-offs of intangible assets
such as goodwill and any other non-cash income or charges expensed for such
period (including such charges in respect of Phantom Stock Accruals, but
expressly excluding any payments made in cash or Cash Equivalents on account of
any Phantom Stock Agreements) and (except to the extent received or paid in
cash by the Credit Parties) income or loss attributable to equity in Affiliates
for such period, excluding from the calculation of such operating income
(determined on a consolidated basis without duplication in accordance with
GAAP) any extraordinary and unusual gains or losses (determined on a
consolidated basis

 

2

 

without
duplication in accordance with GAAP) during such period and excluding from the
calculation of such operating income the income or loss from any Casualty
Events and Dispositions.  Notwithstanding
the foregoing which may be to the contrary, the following shall not be
deducted in determining operating income: amounts accrued or paid as consent
fees, waiver fees, deferred financing costs or intangible assets which are
written off as a consequence of the waiver, amendment, repayment or discharge
of Indebtedness under or with respect, to the extent paid on or around the
Effective Date only, to (x) the Existing Credit Agreement, (y) this
Agreement and the other financial proposals preceding this Agreement, and (z) the
Camping World Credit Facility, provided further, however, that items (x), (y) and
(z) shall not be applicable for purposes of this definition in calculating
EBITDA in connection with any future transactions entered into by the Company.

 

Notwithstanding
the foregoing, if during any period for which EBITDA is being determined, any
Credit Party shall have consummated any Acquisition and (if such acquisition is
a stock or other equity Acquisition) the company acquired in such Acquisition
becomes a Subsidiary in accordance with the provisions of Section 6.10(a) then,
for all purposes of this Agreement, with the exception of the calculation of
Excess Cash Flow, EBITDA shall be determined on a pro forma basis as if such
Acquisition had been made or consummated on the first day of such period.

 

(iii)          to delete the
definition of “Excess Cash Flow” set forth therein in its entirety and
to replace it with the following -

 

“Excess
Cash Flow” means, for each fiscal year, commencing with the fiscal year
ending December 31, 2010 and for each fiscal year thereafter, (a) the
sum of EBITDA plus Related Retail Sale-Leaseback Proceeds received in such
fiscal year minus (b) the sum of the following (to the extent not deducted
in computing EBITDA):  (i) Cash
Interest Expense for such fiscal year, plus (ii) the aggregate amount of
all Non-Financed Capital Expenditures made during such fiscal year, plus (iii) all
regularly scheduled payments, mandatory prepayments and voluntary prepayments
(other than any voluntary prepayments in respect of the Camping World Credit
Agreement) of principal on any Indebtedness (including the Term Loans and the
principal component of any payments in respect of Capital Lease Obligations for
such fiscal year), plus (iv)  the aggregate amount paid, or required to be
paid, in cash in respect of income, franchise, and other like taxes (excluding
real estate taxes) for such fiscal year, plus (v) all Permitted Tax
Distributions to the extent paid in cash during such fiscal year, plus (vi) any
payments in respect of (x) deferred compensation or (y) the Phantom
Stock Agreements to the extent permitted to be paid pursuant to Section 7.6,
in each case, (x) and (y), to the extent paid in cash or Cash Equivalents
during such fiscal year, plus (vii) any other Restricted Junior Payments
made in cash to the extent permitted to be made pursuant to Section 7.6,
in each case, to the extent paid in cash or Cash Equivalents during such fiscal
year minus (c) any net increase in Working Capital during such fiscal year
plus (d) any net decrease in Working Capital during such fiscal year.

 

3

 

(iv)          to delete the
definition of “Restricted Junior Payment” set forth therein in its
entirety and to replace it with the following -

 

“Restricted
Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of any Credit Party
now or hereafter outstanding, except a dividend payable solely in shares of
that class of stock to the holders of that class; provided, however,
that any payments in cash or Cash Equivalents on account of any Phantom Stock
Agreements shall constitute a Restricted Junior Payment, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of any Credit Party now or hereafter outstanding, (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of any Credit Party now or
hereafter outstanding, and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness.

 

(v)           to add the following definition in
the appropriate alphabetical order:

 

“First
Amendment” shall mean that certain First Amendment to Second Amended and
Restated Credit Agreement dated as of August     ,
2010, by and among the Credit Parties, Agent and Lenders party thereto.

 

(b)           Section 7.6 of the Credit
Agreement (Restricted Junior Payments and Cash Flow Distributions) is hereby
amended to add a new subsection (v) after the end of subsection (iv) set
forth therein as follows:

 

“and
(v) so long as no Default or Event of Default shall have occurred or be
continuing or shall be caused thereby, the Borrower make any payments in cash
or Cash Equivalents in respect of Phantom Stock Accruals;”

 

(c)           Section 7.7 of the Credit
Agreement (Transactions with Affiliates) is hereby amended to delete subsection
(iv) set forth therein in its entirety and to replace it with the
following:

 

“(iv)        the Borrower may make payments under the
Phantom Stock Agreements for key employees of the Borrower to the extent that
such payments are permitted to be made pursuant to the other provisions of this
Agreement;”

 

(d)           Section 7.16 of the
Credit Agreement (Compensation Payments to Stephen Adams; Management
Compensation) is hereby deleted in its entirety and replaced with the
following:

 

“7.16.     Compensation Payments
to Stephen Adams; Management Compensation  No Credit Party shall pay or cause to be paid
any salary, bonuses or other compensation payments to Stephen Adams except
(a) in the event of a change in circumstances related to management
personnel or management structure of the Credit

 

4

 

Parties
as a result of which Stephen Adams is performing duties other than those
performed by him as Chairman of the Board of Directors of the Borrower as of
the Effective Date, or (b) with the consent of the Required Lenders. 
Notwithstanding anything to the contrary set forth in this Agreement or any
other Loan Document, no Credit Party will make any payments in cash or Cash
Equivalents in respect of any Phantom Stock Accruals or otherwise in respect of
Phantom Stock Accruals pursuant to any Phantom Stock Agreements or otherwise if
a Default or Event of Default has occurred or is continuing or would result
from such payment.”

 

SECTION 4.        Conditions
Precedent.  Agent and
Lenders’ obligations to enter into this Amendment and to perform their
obligations hereunder and the consents and amendments given or made herein are
all subject to the conditions precedent that the Agent shall have received the
following documents and other items, each, satisfactory (in form and substance,
as applicable) to Required Lenders, their sole discretion, duly executed where
appropriate by authorized representatives of the Credit Parties and all other
parties thereto, as the case may be and, notwithstanding anything herein to the
contrary, upon execution of this Amendment by the Credit Parties, Agent and
Lenders immediately shall be entitled to all of the rights, remedies, and
benefits of this Amendment:

 

(a)           The Agent shall have received the
countersignatures of the Credit Parties, and the other parties listed on the
signature pages hereto, to this Amendment evidencing their agreement to
the terms and provisions hereof, and Agent and Required Lenders shall have
evidenced their acceptance thereof by executing this Amendment;

 

(b)           No Default or Event of Default shall
have occurred or be continuing on the date of this Amendment after giving
effect hereto; and

 

(c)           The Agent shall have received all
fees, charges and expenses due and payable to Agent and Lenders pursuant to
this Amendment and/or the other Loan Documents.

 

SECTION 5.  Agreement
in Full Force and Effect as Amended.  Except as specifically amended hereby, the
Credit Agreement and other Loan Documents shall remain in full force and effect
and hereby are ratified and confirmed as so amended.  This Amendment shall not constitute a
novation, satisfaction and accord, cure, release and/or satisfaction of the
Credit Agreement and/or other Loan Documents, but shall constitute an amendment
thereof.  The parties hereto agree to be
bound by the terms and conditions of the Credit Agreement and Loan Documents as
amended by this Amendment, as though such terms and conditions were set forth
herein and therein in full.  Each
reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein”
or words of similar import shall mean and be a reference to the Credit
Agreement as amended by this Amendment, and each reference herein or in any
other Loan Document or any other document or instrument to the Credit Agreement
shall mean and be a reference to the Credit Agreement as amended and modified by
this Amendment.  Each reference in the
Credit Agreement and/or other Loan Documents or any other document or
instrument to any Loan Documents or words of similar import shall mean and be a
reference to the Loan Documents as amended hereby.

 

5

 

SECTION 6.        Representations.  Each Credit Party hereby represents and
warrants to Agent and Lenders as follows as of the date hereof: (a) it is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (b) the execution, delivery and performance
by it of this Amendment and the other Loan Documents to which it is a party are
within its powers, have been duly authorized by all limited liability company,
corporate or other organizational action, as applicable, and do not contravene (i) its
certificate of formation or other organizational documents, or (ii) any
applicable law; (c) no consent, license, permit, approval or authorization
of, or registration, filing or declaration with any Governmental Authority or
other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Amendment by or against it; (d) this
Amendment has been duly executed by it and it has delivered to the Agent true,
accurate and complete executed copies of this Amendment and all schedules and
exhibits hereto; (e) this Amendment constitutes its legal, valid and
binding obligations enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally or by general principles of equity; (f) after
giving effect to this Amendment, it is in compliance with all covenants and
agreements in the Loan Documents and it is not in default under the Credit
Agreement or any other Loan Document and no Default or Event of Default exists,
has occurred and is continuing or would result by the execution, delivery or performance
of this Amendment, and (g) the representations and warranties contained in
the Loan Documents are true and correct in all respects as of the date hereof
as if made on such date.

 

SECTION 7.        RELEASE.  EACH CREDIT PARTY HEREBY ACKNOWLEDGES AND
AGREES THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS COMPLAINT, CLAIM OR
DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR
ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO
SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM AGENT AND THE
LENDERS.  EACH CREDIT PARTY HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT, THE LENDERS
AND EACH OF THEIR RESPECTIVE PREDECESSORS, AGENTS, EMPLOYEES, COUNSEL,
SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”)
FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS,
EXPENSES AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT OR CONDITIONAL, OR
AT LAW OR IN EQUITY, IN ANY CASE ORIGINATING IN WHOLE OR IN PART ON
OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED THAT ANY CREDIT PARTY MAY NOW
OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, IRRESPECTIVE
OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR
REGULATIONS, OR OTHERWISE, AND THAT ARISE FROM ANY LOANS, THE EXERCISE OF ANY
RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND/OR
NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT, INCLUDING, WITHOUT
LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR
RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE.

 

6

 

SECTION 8.        Miscellaneous.

 

(a)           The execution, delivery
and effectiveness of this Amendment shall not, except as expressly provided
herein, be deemed to be an amendment or modification of, or operate as a waiver
of, any provision of the Credit Agreement or any other Loan Document or any
right, power or remedy of Agent, nor constitute a waiver of any provision of
the Credit Agreement or any other Loan Document, or any other document,
instrument and/or agreement executed or delivered in connection therewith or of
any Default or Event of Default under any of the foregoing, in each case
whether arising before or after the date hereof or as a result of performance
hereunder or thereunder.  This Amendment
shall not preclude the future exercise of any right, remedy, power or privilege
available to Agent whether under the Credit Agreement, other Loan Documents, at
law or otherwise.

 

(b)           This Amendment may
be executed in any number of counterparts (including by facsimile), and by the
different parties hereto or thereto on the same or separate counterparts, each
of which shall be deemed to be an original instrument but all of which together
shall constitute one and the same agreement. 
Each party agrees that it will be bound by its own facsimile signature
and that it accepts the facsimile signature of each other party.  The Credit Parties shall provide original
signed copies of all Loan Documents.  The
descriptive headings of the various sections of this Amendment are inserted for
convenience of reference only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof or thereof.  Whenever the context and construction so
require, all words herein in the singular number herein shall be deemed to have
been used in the plural, and vice versa, and the masculine gender shall include
the feminine and neuter and the neuter shall include the masculine and
feminine.

 

(c)           This Amendment may
not be changed, amended, restated, waived, supplemented, discharged, canceled,
terminated or otherwise modified orally or by any course of dealing or in any
manner other than as provided in the Credit Agreement or the applicable Loan
Document.  This Amendment shall be
considered part of the Credit Agreement and shall be a Loan Document for all
purposes under the Credit Agreement and other Loan Documents.

 

(d)           This Amendment, the
Credit Agreement, and the Loan Documents constitute the final, entire agreement
and understanding between the parties with respect to the subject matter hereof
and thereof and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements between the parties, and shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto and
thereto.  There are no unwritten oral
agreements between the parties with respect to the subject matter hereof and
thereof.  If any provision of this
Amendment is adjudicated to be invalid under applicable laws or regulations,
such provision shall be inapplicable to the extent of such invalidity without
affecting the validity or enforceability of the remainder of this Amendment
which shall be given effect so far as possible.

 

(e)           THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW 

 

7

 

PROVISIONS SET FORTH IN THE CREDIT AGREEMENT AND
SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE
CREDIT AGREEMENT.

 

(f)            No Credit Party may assign, delegate or transfer
this Amendment or any of its rights or obligations hereunder or thereunder and
any delegation, transfer or assignment in violation hereof shall be null and
void.  No rights are intended to be
created under this Amendment for the benefit of any third party donee, creditor
or incidental beneficiary of any Credit Party or any other Person other than
Agent and each Lender.  Nothing contained
in this Amendment shall be construed as a delegation to Agent of any Credit
Party’s duties of performance, including, without limitation, any duties under
any account or contract in which Agent has a security interest or Lien.  This Amendment shall be binding upon the
Credit Parties, the Agent and Lenders and their respective successors and permitted
assigns.  Agent’s and Lenders’ ability to
assign, sell or transfer all of any part of this Amendment shall be governed by
the Credit Agreement.

 

(g)           Each Credit Party
hereby: (i) reaffirms its obligations under the Credit Agreement and each
of the other Loan Documents to which it is a party, and (ii) agrees that
each of such Loan Documents remain in full force and effect and are hereby
ratified and confirmed.  All
representations and warranties made in this Amendment shall survive the
execution and delivery of this Amendment and no investigation by Agent shall
affect such representations or warranties or the right of Agent to rely upon
them.

 

(h)           Each Credit Party
shall execute and deliver such other documents, certificates and/or instruments
and take such other actions as Agent may reasonably request in order to more
effectively consummate the transactions contemplated hereby.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

8

 

 

SIGNATURE PAGE 1 OF 6 TO

FIRST AMENDMENT AND LIMITED WAIVER TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

IN
WITNESS WHEREOF, the parties have caused this First Amendment to Second Amended
and Restated Credit Agreement to be executed by their respective officers
thereunto duly authorized as of the date first written above to be effective on
such date.

 

	
  CREDIT
  PARTIES:

  	
   

  	
  AFFINITY
  GROUP, INC., as Borrower

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Thomas F. Wolfe

  	
   

  
	
   

  	
   

  	
   

  	
  Name:     Thomas F. Wolfe

  	
   

  
	
   

  	
   

  	
   

  	
  Title:       Senior Vice President

  	
   

  

 

9

 

SIGNATURE PAGE 2 OF 6 TO

FIRST AMENDMENT AND LIMITED WAIVER TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

	
   

  	
   

  	
  AFFINITY
  BROKERAGE, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AFFINITY
  GUEST SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AFFINITY
  ROAD AND TRAVEL CLUB, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AGI
  PRODUCTIONS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAMP
  COAST TO COAST, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COAST
  MARKETING GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EHLERT
  PUBLISHING GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLF
  CARD INTERNATIONAL CORP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLF
  CARD RESORT SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GSS
  ENTERPRISES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  POWER
  SPORTS MEDIA, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TL
  ENTERPRISES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VBI, INC.,
  as Guarantors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Thomas F. Wolfe

  	
   

  
	
   

  	
   

  	
   

  	
  Name:     Thomas F. Wolfe

  	
   

  
	
   

  	
   

  	
   

  	
  Title:       Senior Vice President

  	
   

  

 

10

 

SIGNATURE PAGE 3 OF 6 TO

FIRST AMENDMENT AND LIMITED WAIVER TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

	
   

  	
   

  	
  CAMPING
  REALTY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAMPING
  WORLD CARD SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAMPING
  WORLD, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAMPING
  WORLD INSURANCE SERVICES OF KENTUCKY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAMPING
  WORLD INSURANCE SERVICES OF NEVADA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAMPING
  WORLD INSURANCE SERVICES OF TEXAS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CWI, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CW
  MICHIGAN, INC., as Guarantors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kenneth Marshall

  	
   

  
	
   

  	
   

  	
   

  	
  Name:     Kenneth Marshall

  	
   

  
	
   

  	
   

  	
   

  	
  Title:       Chief Financial Officer

  	
   

  

 

11

 

SIGNATURE PAGE 4 OF 6 TO

FIRST AMENDMENT AND LIMITED WAIVER TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

ADMINISTRATIVE
AGENT:

 

	
   

  	
   

  	
   

  	
  WILMINGTON
  TRUST FSB, as

  	
   

  
	
   

  	
  Administrative
  Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Jeffery Rose

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:     Jeffery Rose

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:       Vice President

  	
   

  

 

12

 

SIGNATURE PAGE 5 OF 6 TO

FIRST AMENDMENT AND LIMITED WAIVER TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

LENDERS:

 

	
   

  	
   

  	
  GOLDENTREE
  LEVERAGE LOAN MASTER FUND, LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  GOLDENTREE LEVERAGE LOAN MANAGER LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Name:     Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Title:       Director – Bank Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLDENTREE
  CREDIT OPPORTUNITIES FINANCING I, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  GOLDENTREE ASSET MANAGEMENT, L.P., its
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Name:     Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Title:       Director – Bank Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLDENTREE
  MASTER FUND, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  GOLDENTREE ASSET MANAGEMENT, L.P., its
  Investment Advisor

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Name:     Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Title:       Director – Bank Debt

  	
   

  

 

13

 

SIGNATURE PAGE 6 OF 6 TO

FIRST AMENDMENT AND LIMITED WAIVER TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

	
   

  	
   

  	
  GOLDENTREE
  MASTER FUND II, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  GOLDENTREE ASSET MANAGEMENT, L.P., its
  Investment Advisor

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Name:     Karen Weber

  	
   

  
	
   

  	
   

  	
   

  	
  Title:       Director – Bank Debt

  	
   

  

 

14Exhibit 10.40

 

STOCK AGREEMENT

 

THIS AGREEMENT, made and entered into as of the 1st day of January, 2010 by and between Affinity Group, Inc., a Delaware corporation (“AGI”)
and [                 
] (“Executive”);

 

W I T N E S S E T H

 

WHEREAS, AGI proposes to employ the Executive in the
operations of the Company (as hereinafter defined) and AGI is desirous of
affording Executive incentives, in the form of phantom stock of the Company, in
connection therewith;

 

NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, AGI and Executive
hereby agree as follows:

 

ARTICLE I

 

EMPLOYMENT

 

Section l.l.   Employment.  The Company hereby employs the Executive as
[                  ] of the Company to
perform such duties and discharge such functions in and about the business and
affairs of AGI and/or one or more of its subsidiaries, as the board of
directors of the Company may from time to time determine.  Executive agrees, during the term hereof, to
diligently and in good faith perform and discharge such duties and functions
and Executive shall devote all of his working time, energy and ability
exclusively to the performance of his duties hereunder.  Executive shall not directly or indirectly
engage or participate in the operations or management of, or render any
services to, any other businesses or enterprises.

 

Section l.2.  Basic
Compensation.  The Company agrees to
pay Executive a base annual salary and annual bonus (or such other amount as
may be from time to time determined by the board of directors of the Company)
(collectively the “Basic Compensation”). 
Basic Compensation payable under this section shall be payable in
accordance with such practices and procedures as are generally applicable to
other employees of the Company.

 

Section l.3.  Fringe
Benefits.  While Executive is in the
employ of the Company, the Company agrees to provide to Executive such benefits
as may be provided by the Company from time to time to its similarly situated
employees.

 

Section 1.4.  Severance.  If the Company terminates the employment of
the Executive without Cause or if the Executive terminates employment with the
Company for Good Reason, the Company shall (i) make a lump sum severance
payment equal to one (1) year of Basic Compensation (at the level being
paid at the time of termination), and (ii) pay to the Executive the amount
of the bonus, if any, accrued or earned to the date of such termination under
section 1.5 hereof.  Such severance
payment shall be made within 30 days after the determination of the amount of
the accrued bonus calculated pursuant to the provisions of section 1.5
hereof.  It is agreed that any
termination of employment is without prejudice to 

 

1

 

any
other remedy to which the Company may be entitled, either by law, in equity or
under this Agreement.

 

In addition to the foregoing, if, during the period of three (3) years
following a Change of Control, the Company terminates the employment of the
Executive without Cause or if the Executive terminates employment with the
Company for Good Reason, the Company shall, at its expense, continue providing
to Executive, for the period of three (3) years following a Change of
Control, the same life and health insurance benefits as provided to Executive
immediately prior to such termination.

 

The Company has the absolute right to terminate this Agreement, and the
employment of the Executive hereunder, for Cause without any further obligation
to the Executive in respect of severance payments to the Executive
hereunder.  For purposes of this
Agreement, Cause includes, but is not limited to the following:

 

(i)    Executive’s breach of the
terms of this Agreement or any other legal obligation to the Company; or

 

(ii)   Executive’s fraud,
dishonesty, negligence, misconduct or other deliberate action which causes
injury to the Company or any of its subsidiaries or to their respective
reputations or an act of the Executive involving moral turpitude or a serious
crime.

 

The Executive shall not be entitled to severance under this section 1.4
if the employment of the Executive is terminated for any of the following
reasons:

 

(i)    the Executive terminates
this Agreement at any time;

 

(ii)   death of the Executive;

 

(iii)  the Disability of the
Executive.

 

Section 1.5.  Bonus.  The Company adopts, from time to time, formal
written bonus programs for certain of its executives.  Such written bonus programs, if adopted and
if extended to the Executive, shall be in addition to the Basic Compensation
payable under section 1.2 hereof.  The
amount of the bonus will be determined on mutually agreed-upon objectives.  The Company reserves the absolute right to
amend, replace or terminate, from time to time, any such written bonus program
and to determine the extent of its application, all without any liability to
the Executive.  The bonus, if any,
payable under this section 1.5 shall be paid in accordance with the terms of
the formal written bonus program adopted by the Company.

 

Section l.6.  Term.  The term of this Agreement shall commence on January 1,
2010 and continue through December 31, 2012; provided, however, that
Executive shall have the continuing option to immediately terminate the
employment provided by section l.l hereof by giving two weeks’ notice thereof
to the Company and the Company shall have the continuing option to immediately
terminate the employment provided by section l.l hereof by giving written
notice thereof to Executive which notice may be effective immediately.  Upon any such termination, all of the rights
and obligations set forth in this Article I shall terminate provided,
only, that the Company shall pay to Executive the severance, if any, payable
under section 1.4 hereof.

 

2

 

ARTICLE II

 

PHANTOM STOCK INTEREST

 

Section 2.l.  Award of
Phantom Stock Interest.  The Company
hereby awards the Phantom Stock Interest to the Executive.

 

Section 2.2. Payment of
Phantom Stock Interest.  The Company
shall pay, and Executive shall be entitled to receive, the cash value of the
Phantom Stock Interest, which shall be paid as follows:

 

(i)     one-third thereof within
30 days of the determination of such cash value in accordance with the
provisions of section 4.3 hereof, and

 

(ii)    one-third thereof on the
first anniversary of the Determination Date, and

 

(iii)   one-third thereof on the
second anniversary of the Determination Date.

 

Section 2.3.  Beneficiary.  Executive may designate (by filing with the
Company a written beneficiary designation form in form reasonably acceptable to
the Company) one or more primary beneficiaries or contingent beneficiaries to
receive all or a specified part of the cash value of the Phantom Stock Interest
which, at the time of Executive’s death, may remain unpaid under this Agreement
and Executive may change or revoke any such designation from time to time. No
such designation, change or revocation shall be effective unless executed by
Executive and accepted by the Company during Executive’s lifetime.  Each such designation, change or revocation
shall be effective under this Agreement until changed or revoked in the manner
specified herein.  No such change or
revocation shall require the consent of any beneficiary theretofore designated
by Executive.  If Executive fails to
designate a beneficiary, or designates a beneficiary and thereafter revokes
such designation without naming another beneficiary, or designates one or more
beneficiaries and all such beneficiaries so designated fail to survive
Executive, then the beneficiary of the Phantom Stock Interest, or the part
thereof as to which Executive’s designation fails, as the case may be, shall be
the representative of Executive’s estate. 
Unless Executive has otherwise specified in the beneficiary designation,
the beneficiary or beneficiaries designated by Executive shall become fixed as
of Executive’s death so that, if a beneficiary survives Executive but dies
before the receipt of all payments due such beneficiary, such remaining
payments shall be payable to the representative of such beneficiary’s estate.

 

Section 2.4.   Benefits Not Transferable.  Neither Executive nor any beneficiary
hereunder shall have any transferable interest in the payments due hereunder
nor any right to anticipate, alienate, dispose of, pledge or encumber the same
prior to actual receipt thereof, nor shall the same be subject to attachment,
garnishment, execution following judgment or other legal process instituted by
creditors of Executive or any such beneficiary provided that the unpaid cash
value of Executive’s Phantom Stock Interest and any payments due hereunder
shall at all times be subject to set-off for debts owed by the Executive to the
Company or its affiliates.

 

3

 

Section 2.5.  Nature of the
Company’s Obligation.  The Company
shall maintain a record of the Phantom Stock Interest but the Company shall not
be required to segregate any funds or other assets to be used for the payment
of benefits under this Agreement and no such record shall be considered as
evidence of the creation of a trust fund, an escrow or any other segregation of
assets for the benefit of Executive or any beneficiary of Executive.  The obligation of the Company to make the
payments described in this Agreement is an unsecured contractual obligation of
the Company only, and neither Executive nor any beneficiary of Executive shall
have any beneficial or preferred interest by way of trust, escrow, lien or
otherwise in and to any specific assets or funds.  Executive specifically acknowledges that the
Phantom Stock Interest to be awarded pursuant to the terms of this Agreement
are not securities in the Company and do not create any right in the equity or
capital of the Company or any of its affiliates.  Executive and each beneficiary of Executive
shall look solely to the general credit of the Company for satisfaction of any
obligations due or to become due under this Agreement, it being expressly
acknowledged by the Executive that the obligations of the Company hereunder are
junior and subordinate in right of payment to the obligations of the Company to
its or the Company’s lenders.  If the
Company should, in its sole discretion, earmark or set aside any funds or other
assets to pay benefits hereunder, the same shall, nevertheless, remain and be
regarded as part of the general assets of the Company subject to the claims of
its general creditors (and shall not be considered to be held in a fiduciary
capacity for the benefit of Executive or any beneficiary hereunder), and
neither Executive nor any beneficiary of Executive shall have any legal,
beneficial, security or other property interest therein.  Upon delivery by the Company to Executive of
the consideration as provided in section 2.2, the rights and obligations of the
Company and Executive under this Article II shall terminate and Executive
shall have no other or further rights under this Article or in respect
hereof.

 

ARTICLE III

 

COVENANT NOT TO COMPETE

 

Section 3.l.  Covenant
Not to Compete.  Executive hereby
covenants that, for a period of eighteen months next following the
Determination Date (or such shorter period for which the Company continues to
be owned or operated by the Parent or its affiliates), Executive shall not be
engaged or interested in any business which competes, directly or indirectly,
with the publication or membership businesses of the Company or any subsidiary
of the Company (whether as a proprietor, partner with another, shareholder,
agent or consultant of, employee of or lender to, another) in the recreational
vehicle, camping, outdoor living or other markets then served by the Company or
such subsidiary, except as a proprietor, partner, shareholder, employee or
consultant in or to the Company or any entity controlled by, controlling or
under common control with the Company, provided that if the employment of
Executive is terminated by the Company without Cause, the foregoing covenant
shall not apply (without affecting the obligations hereinafter contained in
this section 3.l in respect of disclosures or solicitations by Executive)
unless the Executive shall have been paid severance pursuant to section 1.4
hereof.  Executive agrees that he will
not at any time disclose to any person or other entity who or which is, or
reasonably may be expected to be, in competition with the Company or its
affiliates, any confidential information or trade secrets of the Company, any
subsidiary of the Company or any of their respective affiliates, the contents
of any customer lists of the Company, any subsidiary of the Company or any of
their respective affiliates or the general needs of the customers or other
contracting parties with the Company, any subsidiary of the Company or any of
their respective affiliates, provided, however, the 

 

4

 

foregoing shall not prevent Executive from responding to the request of
a governmental agency or pursuant to a court order or as otherwise required by
law.  For a period of one year following
the Determination Date, Executive agrees not to offer employment to, not to
discuss the nature of any prospective employment opportunities with, and not to
otherwise solicit any employee of the Company or such subsidiary (or any person
who was an employee of the Company or such subsidiary within 180 days of the
Determination Date) on his own behalf, on behalf of any employer of the
Executive, on behalf of any entity with which the Executive is acting as a
consultant or with which the Executive is then otherwise affiliated.

 

Section 3.2.  Remedies.  Recognizing that a breach of the covenant
contained in section 3.1 would cause the Company irreparable injury and the
damages at law would be difficult to ascertain, Executive consents to the
granting of equitable relief by way of a restraining order or temporary or permanent
injunction by any court of competent jurisdiction to prohibit the breach or
enforce the performance of the covenants contained in section 3.l.  The invalidity or unenforceability of any
provision of this Article or the application thereof to any person or
circumstance shall not affect or impair the validity or enforceability of any
other provision or the application of the first provision to any other person
or circumstance.  Any provision of this Article that
might otherwise be invalid or unenforceable because of contravention of any
applicable law, statute or governmental regulation shall be deemed to be
amended to the extent necessary to remove the cause of such invalidation or
unenforceability and such provision as so amended shall remain in full force
and effect as a part hereof.

 

ARTICLE IV.

 

DEFINITIONS AND GENERAL
PROVISIONS

 

Section 4.l.  Definitions.  As used in this Agreement, the following
terms shall have the respective meanings set forth below:

 

Accounting Period:  If the Determination Date falls on December 15th
through December 31st, inclusive, the Fiscal Year of the Company in which
the Determination Date falls; if the Determination Date falls on January 1st
through June 14th, inclusive, the Fiscal Year of the Company ending
immediately prior to the date on which the Determination Date falls; if the
Determination Date falls on June 15th through December 14th,
inclusive, the Rolling Four Fiscal Quarters ending immediately prior to the
date on which the Determination Date falls.

 

Acquisition:  The purchase by the Company an existing
business operation as a going concern.

 

Base Cost:  $[              ] (US dollars) plus (i) the
purchase price (or other consideration therefore determined in accordance with
generally accepted accounting principles) for any Acquisition made after the
date hereof less (ii) the sales price (or other consideration therefor
determined in accordance with generally accepted accounting principles) any
Disposition made after the date hereof.

 

Company:  Collectively, AGI and each subsidiary of AGI
that is an “S corporation” or a substantially similar pass-through entity
(including limited liability companies and partnerships) for federal income tax
purposes.

 

5

 

Company Value:  With respect to any Accounting Period, the
excess, if any, of (x) the Formula Value for such Accounting Period over (y) the
Base Cost.

 

Change of Control:  A “Change of Control” will be deemed to have
occurred at such time as (a) the Existing Holders, individually or in the
aggregate, shall cease to beneficially own (as defined under Rule 13(d)(3) or
any successor rule or regulation promulgated under the Securities Exchange
Act of 1934), directly or indirectly, 50.1% or more of the voting equity interests
of the Company, (b) there shall be consummated any consolidation or merger
of the Company or the Parent in which the Company or the Parent, as the case
may be, is not the continuing or surviving corporation or pursuant to which the
voting equity interests of the Company or the Parent would be converted into
cash, securities or other property, other than a merger or consolidation of the
Company or the Parent in which the holders of the voting equity interests of
the Company or the Parent, as the case may be, outstanding immediately prior to
the consolidation or merger hold, directly or indirectly, at least a majority
of the voting equity interests of the surviving corporation immediately after
such consolidation or merger, (c) there is a sale, lease or transfer of
all or substantially all of the assets of the Company or the Parent to any
person or group (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934), or (d) the shareholders of the Company
or the Parent shall approve any plan or proposal for the liquidation or
dissolution of the Company or the Parent, as the case may be.

 

Determination Date:  The date of any of the following events: (i) termination
of the Executive’s employment, whether by death or otherwise, (ii) a Sale,
or (iii) December 31, 2012.

 

Disability:  The physical or mental incapacity of
Executive for a period of more than 60 consecutive days, the determination of
which by the board of directors of the Company shall be conclusive on the
parties hereto.

 

Disposition:  The sale by the Company an existing business
operation as a going concern.

 

Existing Holders:  Stephen Adams, his spouse and lineal
descendants and trusts for the exclusive benefit of any of the foregoing
persons and any affiliate of Stephen Adams.

 

Fiscal Quarter:  The fiscal quarter of the Company ending on
the last day of the calendar quarter.

 

Fiscal Year:  The fiscal year of the Company as the case
may be, ending on the last day of the calendar year.

 

Formula Value:  For any Accounting Period, the product of
eight (8) and Operating Profit of the Company for such Accounting Period.

 

Good Reason:  The occurrence of one or more of the
following events, without Executive’s written consent, within three (3) years
following a Change in Control (or before the Change in Control if the
occurrence is directly connected to the Change in Control and the Change in
Control occurs):  (a) the Executive
is assigned any duties inconsistent with Executive’s position (including
status, offices, titles and reporting requirements), authorities, duties or any
other responsibilities as in effect immediately prior to the announcement of
the 

 

6

 

Change in Control, (b) a reduction in base compensation or in any
bonus plan from the amounts in effect immediately prior to the announcement of
the Change in Control, or (c) Executive is required to be located outside
the same metropolitan area as Executive’s office location immediately prior to
the announcement of the Change in Control.

 

Operating Profit:  With respect to any Accounting Period (i) the
net income of the Company derived from the ongoing business operations of such
entity or entities for such period plus (ii) interest, federal and state
income taxes or any provision for such taxes, depreciation, amortization,
financing costs, management fees and 90 % of aircraft expenses.  Operating Profit shall be determined on the
accrual method of accounting and in accordance with generally accepted
accounting principles consistently applied, provided that (i) in no event
shall tradeout or barter transactions or extraordinary items of revenue or
expense (including revenue or expense from non-operating investments, revenue
or expense from the sale or purchase of assets not considered an Acquisition or
Disposition or revenue or expense not derived from business operations) be
reflected in net income and (ii) amounts paid or received in settlement of
(or payment of judgments in respect of) litigation which did not arise in the
ordinary course of the business operations of such entity or entities or any of
their respective subsidiaries, shall not be reflected in net income (it being
understood that subsidiaries of the Company do have litigation which shall be
considered litigation in the “ordinary course” of business operations).  If there has occurred a Disposition within
the Accounting Period and the net proceeds of such Disposition have been
received by the Company prior to the date on which Company Value is to be
calculated as herein provided, the net income relating to the subject of such
Disposition shall be deleted from the calculation of Operating Profit.  If there has occurred an Acquisition within
the Accounting Period, the income from which is reflected in the Accounting
Period only partially, the Operating Profit with respect to the subject of such
Acquisition shall be adjusted, on a historical pro forma basis, to reflect
Operating Profit for the complete Accounting Period.

 

Parent:  Affinity Group Holding, Inc., a Delaware
corporation, or such other entity which holds in excess of 80 % of the issued
and outstanding equity securities of the Parent.

 

Phantom Stock Interest:  The cash equivalent of [                ] (      %) of Company Value.

 

Rolling Four Fiscal Quarters:  Four consecutive Fiscal Quarters.

 

Section 4.2.  Withholding
Taxes.  The Company may withhold from
any payment to be made under this Agreement (and transmit to the proper taxing
authority) such amount as it may be required to withhold under any federal,
state or other law.

 

Section 4.3.  Administration.  The Company and its executive officers shall
have full power to interpret, construe and administer this Agreement, including
authority to determine any dispute or claim with respect thereto.  The determination of the Company in any
matter, made in good faith, shall be binding and conclusive upon Executive and
all other persons having any right or benefit hereunder.  Unless Executive shall give notice to the
Company objecting to the Company’s calculation of Base Cost, Company Value,
Formula Value or Operating Profit for any period (or any other calculation to
be determined for the purposes of this Agreement) within thirty days after
notice of the determination thereof by the Company, such calculation shall
conclusively be deemed to have been accepted by the parties hereto.  The cash value of the Phantom Stock Interest
shall be set forth in a certificate of the chief 

 

7

 

financial officer of the Company, the determination of which shall be
made within 150 days of the Determination Date and shall be conclusive and
binding upon the Executive provided that, if the Executive shall disagree with
the amount of the Base Cost, Company Value, Formula Value or Operating Profit
as determined by the chief financial officer of the Company (written notice of
which shall be given by the Executive within 30 days of the receipt of such
determination by the chief financial officer), Base Cost, Company Value,
Formula Value or Operating Profit shall be determined by the independent
certified public accountants of the Company or, if the Company has not then
engaged a firm of independent certified public accountants, any “big six” firm
of public accountants selected by the Company (the “Independent Accountant”).  The Independent Accountant shall determine
the Base Cost, Company Value, Formula Value or Operating Profit of the Company
within 30 days after its appointment and shall be instructed to deliver to the
Company and the Executive a written report of its determination of the amount
of such Base Cost, Company Value, Formula Value or Operating Profit.

 

The cost of the accounting services performed by the Independent
Accountant shall be borne by the Company unless the amount of the Base Cost,
Company Value, Formula Value or Operating Profit as determined by the
Independent Accountant is the same as the amount determined by the Company’s
chief financial officer (or is an amount which results in a lower value for the
Executive of the Phantom Stock Interest or the bonus payable under section
1.5), in which event the entire cost of the services of the Independent
Accountant shall be borne by the Executive and shall be deducted by the Company
from the Phantom Stock payment to be made pursuant to section 2.2 hereof or the
bonus payable under section 1.5, as the case may be.

 

Any of the obligations of the Company hereunder may be performed by an
affiliate of the Company and such performance by an affiliate shall be deemed
to satisfy any such obligation of the Company hereunder.

 

Section 4.4.  Notices.  All notices, requests and other
communications from any of the parties hereto to the other shall be in writing
and shall be considered to have been duly given or served when personally
delivered to any individual party, an executive officer of any corporate party,
or on the first day after the date of deposit with Federal Express for next day
delivery, postage prepaid, or on the third day after deposit in the United
States mail, certified or registered, return receipt requested, postage
prepaid, or on the date of telecopy, fax or similar telephonic transmission
during normal business hours, provided that the recipient has specifically
acknowledged by telephone receipt of such telecopy, fax or telephonic transmission;
addressed, in all cases, to the party at his or its address set forth below, or
to such other address as such party may hereafter designate by written notice
to the other party:

 

(i)  If to the Company to:

 

2575 Vista Del Mar Drive

Ventura, CA  93001

Attn:  Stephen Adams

 

8

 

(ii)  If to Executive
to:

 

 

 

 

Section 4.5.  Binding
Effect.  The provisions of this
Agreement shall not give Executive any rights to continue to be employed or
otherwise retained by the Company or any affiliate thereof.  Except as so provided, this Agreement shall
be binding upon and inure to the benefit of the parties hereto, the respective
successors and assigns of the Company and the beneficiaries, personal
representatives and heirs of Executive.

 

Section 4.6.  Controlling
Law.  This Agreement shall be
construed, and the legal relations between the parties determined, in
accordance with the laws of the state of incorporation of the Company.

 

Section 4.7.  Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original without the
production of the others, but all of which together shall constitute one and
the same instrument.

 

Section 4.8.  Entire
Agreement.  This Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof and may not be varied, modified or amended except by a writing signed by
the parties to be charged.  The making,
execution and delivery of this Agreement by the parties hereto have been
induced by no representations, statements, warranties or agreements of the
other except those herein expressed.

 

Section 4.9.  Headings.  The division of this Agreement into sections
and paragraphs and the titles assigned thereto is only a matter of convenience
for reference and shall not define or limit any of the terms or provisions
thereof.

 

IN WITNESS WHEREOF, the individual party has
hereunto set his hand and the corporate party has caused these presents to be
executed by a proper officer thereunto duly authorized all as of the day and
year first above written.

 

	
   

  	
   

  	
  AFFINITY
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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9

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