SECOND LIEN NOTE PURCHASE AGREEMENT

 

“ Agent ” means the Administrative Agent.

 

“ Agreement ” means this Credit Agreement, as amended, supplemented or otherwise modified from time to time.

 

“ Applicable Percentage ” means with respect to any Purchaser in respect of any indemnity claim under Section 10.3(c) arising out of an action or omission of the Administrative Agent under this Agreement, the percentage of the total Notes hereunder represented by the aggregate amount of such Purchaser’s Notes hereunder.

 

“ Approved Fund ” means, with respect to any Purchaser, any fund that invests (in whole or in part) in commercial loans and is managed, advised or serviced by such Purchaser or the same investment advisor as such Purchaser or by an Affiliate of such Purchaser or such investment advisor.

 

“ Asset Sale ” has the meaning given to that term in the FRH Preferred.

 

“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Purchaser and an assignee (with the consent of any party whose consent is required by Section 10.4), and accepted by the Administrative Agent, or any other form approved by the Administrative Agent.

 

“ Basic Documents ” means the Note Documents, the First Lien Loan Documents, the Senior Subordinated Note Indenture, the Senior Subordinated Notes, and any related agreement.

 

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

 

“ Bond Purchase Agreement ” has the meaning given to that term in Section 5.1(c) hereof.

 

“ Borrower ” means Affinity Group, Inc., a Delaware corporation.

 

“ Borrowing ” means the issuance of a Note or Notes under this Agreement.

 

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

 

“ Camping World ” means, collectively, CWI, Inc., a Kentucky corporation and a Wholly-Owned Subsidiary of the Borrower, and Camping World, Inc, a Kentucky corporation and a Wholly-Owned Subsidiary of CWI, Inc.

 

“ Camping World Credit Agreement ” means the credit agreement among the Camping World Entities and the Camping World Purchasers, with such terms and conditions as shall be satisfactory in form and substance to the First Lien Administrative Agent.

 

“ Camping World Credit Facility ” means an asset-based credit facility established pursuant to the Camping World Credit Agreement having market terms and conditions

 

 

as determined by the First Lien Administrative Agent, secured by a first lien on the equity and assets of the Camping World Entities and providing aggregate revolving credit commitments not less than $18,000,000 and not in excess of $38,500,000.

 

“ Camping World Entities ” means CWI, Inc., Camping World, Inc. and their Subsidiaries.

 

“ Camping World Financing ” means (i) the Camping World Credit Facility in accordance with the terms and conditions of the Camping World Credit Agreement or another credit facility on terms that are not less favorable than the Camping World Credit Facility providing for commitments of not more than $38,500,000 and funding of the initial Notes thereunder in an amount not less than $16,650,000, or (ii) the consummation of an equity offering (other than an offering of Disqualified Stock) of the Camping World Entities for net proceeds not less than $16,650,000.

 

“ Camping World Purchasers ” means the holders of the indebtedness under the Camping World Credit Facility and any agents for such Purchasers.

 

“ Camping World Subordination Agreement ” means the Subordination and Intercreditor Agreement to be executed and delivered by all of the Camping World Entities, the Administrative Agent, the First Lien Administrative Agent and the Camping World Purchasers, as such agreement may be amended, supplemented or otherwise modified from time to time, in form and substance satisfactory to the Required Purchasers.

 

“ Capital Expenditures ” means, for any period, (A) the sum for the Credit Parties (determined on a consolidated basis without duplication in accordance with GAAP of the aggregate amount of expenditures (including the aggregate amount of Capital Lease Obligations incurred during such period) made to acquire or construct fixed assets, plant and equipment (including renewals, improvements and replacements, but excluding repairs) during such period computed in accordance with GAAP; provided that such term shall not include any such expenditures in connection with any replacement or repair of Property affected by a Casualty Event minus (B) any Net Cash Payments from a Disposition permitted hereunder (other than a Sale-Leaseback Transaction) reinvested pursuant to Section 2.4(b)(iii) not in excess of the aggregate amount of Capital Expenditures previously made in respect of assets subject to such Disposition.  Notwithstanding the foregoing, the purchase price of any Acquisition shall not be deemed a “Capital Expenditure” for purposes hereof.

 

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“ Cash Equivalents ” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government, (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct

 

 

obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, the highest rating obtainable from either Standard & Poor’s (“ S&P ”) or Moody’s Investors Service, Inc. (“ Moody’s ”); (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Purchaser or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (1) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (2) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (v) shares of any money market mutual fund that (1) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (2) has net assets of not less than $500,000,000, and (3) has the highest rating obtainable from either S&P or Moody’s, or (c) other cash equivalent investments agreed to from time to time between the Borrower and the First Lien Administrative Agent.

 

“ Cash Interest Expense ” means, for any period, the sum, for the Credit Parties (determined on a consolidated basis without duplication in accordance with GAAP) of the following: (a) all interest in respect of Indebtedness actually paid during such period plus (b) the amount of Restricted Junior Payments made to the Holding Company pursuant to Section 7.6(a) during such period unless such Restricted Junior Payment is made with the proceeds of distributions or other payments made by FRH to CWFR in respect of the FRH Preferred Equity Interest and is subsequently distributed by CWFR to the Borrower plus (c) the net amounts paid in cash under Hedging Agreements during such period including, fees, but excluding legal fees and other similar transaction costs and payments made in cash by reason of the early termination of Hedging Agreements in effect on the Effective Date plus (d) all fees, including letter of credit fees and expenses, paid hereunder after the Effective Date but excluding all fees, commissions and expenses (including reimbursement of legal fees and similar transaction costs) paid on the Effective Date in respect of this Agreement.  Notwithstanding anything contained in the foregoing which may be to the contrary, consent fees, waiver fees, deferred financing costs or intangible assets which are paid or are written off as a consequence of the waiver, amendment, repayment and discharge of Indebtedness shall not be included in Cash Interest Expense.

 

Notwithstanding the foregoing, if during any period for which Cash Interest Expense is being determined, any Credit Party shall have consummated any Acquisition, then, for all purposes of this Agreement, any Indebtedness incurred in connection with such Acquisition shall be deemed to have incurred on a pro-forma basis, as if such Acquisition had been consummated on the first day of such period and under the assumption that interest for such period had been equal to the actual weighted average interest rate in effect for the Notes hereunder on the date of such Acquisition.

 

“ Casualty Event ” means, with respect to any Property of any Person, any loss of or damage to, or any condemnation or other taking of, such Property for which such Person or any of its Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or other compensation.

 

 

“ Change in Law ” means (a) the adoption of any law, rule or regulation after Effective Date, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority (whether or not having the force of law) after the Effective Date or (c) compliance by any Purchaser (or, for purposes of Section 2.14(b), by any lending office of such Purchaser or by such Purchaser’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Effective Date.

 

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

“ Collateral ” means, collectively, all of the real, personal and mixed property (including capital stock and other equity interests) in which Liens are purported to be granted pursuant to the Collateral Documents as security for all obligations of the Credit Parties hereunder.

 

“ Collateral Documents ” means the Holding Company Collateral Documents, the Pledge Agreement, the Security Agreement, the Trademark Security Agreement, the Mortgages and all other agreements, instruments or documents delivered by any Credit Party or Affiliate thereof pursuant to this Agreement or any of the other Note Documents in order to grant to the Administrative Agent a Lien on any real, personal or mixed property of that Credit Party as security for any of its obligations hereunder.

 

“ Commitment ” means, with respect to each Note Purchaser, the agreement of such Note Purchaser to purchase Notes hereunder.  The aggregate original amount of the Commitments is $9,716,666.67.

 

“ Compliance Certificate ” means a certificate signed by a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 7.9, and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 4.4 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate.

 

“ Conforming Leasehold Interest ”  means any Recorded Leasehold Interest as to which the lessor has agreed in writing for the benefit of the Administrative Agent (which writing has been delivered to the Administrative Agent), whether under terms of the applicable lease, under the terms of a Landlord Consent and Estoppel, or otherwise, to the matters described in the form of Landlord Consent and Estoppel approved by the Administrative Agent in its reasonable discretion, which interest, if a subleasehold interest or sub-subleasehold interest, is not subject to any contrary restrictions contained in a superior lease or sublease.

 

“ Consolidated Fixed Charges Ratio ” means, as at any date, 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 Non-Financed Capital Expenditures made during such period plus (iii) any increase in Deferred Revenues during such period minus (iv) any decrease in Deferred Revenues 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, but excluding (x) any prepayments pursuant to Section 2.4 (y) any Senior Principal Refunding Payments and (z) the Hedging Agreement settlement payment made on the Effective Date in an aggregate amount not to exceed $2,600,000) 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 during such period but excluding any payments in respect of Phantom Stock Agreements.

 

“ Consolidated Interest Coverage Ratio ” means, as at any date, the ratio of (a) EBITDA for the period of four consecutive fiscal quarters ending on or most recently ended prior to such date, to (b) Cash Interest Expense for such period.

 

“ Consolidated Senior Leverage Ratio ” means, as at any date, the ratio of (a) Senior Debt minus cash and Cash Equivalents held by the Credit Parties on such date to the extent such cash and Cash Equivalents are unrestricted and available for the payment of the debts of the Credit Parties in an aggregate amount not in excess of the sum of $10,000,000 plus cash collateral held by the Issuing Lender (as defined in the First Lien Credit Agreement) pursuant to the terms of the First Lien Credit Agreement to (b) EBITDA for the period of four consecutive fiscal quarters ending on or most recently ended prior to such date.

 

“ Consolidated Total Leverage Ratio ” means, as at any date, the ratio of (a) the Indebtedness of the Credit Parties excluding amounts described in clauses (d) and (g) of the definition of “Indebtedness” (determined on a consolidated basis without duplication in accordance with GAAP), including Subordinated Indebtedness, minus cash and Cash Equivalents held by such Credit Parties on such date to the extent to such cash and Cash Equivalents are unrestricted and available for the payment of the debts of the Credit Parties in an aggregate amount not in excess of the sum of $10,000,000 plus cash collateral held by the Issuing Lender (as defined in the First Lien Credit Agreement) pursuant to the terms of the First Lien Credit Agreement to (b) EBITDA for the period of four consecutive fiscal quarters ending on or most recently ended prior to such date.

 

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “ Controlling ” and “ Controlled ” have meanings correlative thereto.

 

“ Credit Parties ” means (a) the Borrower and (b) its Subsidiaries other than CWFR.

 

“ CWFR ” means CWFR Capital Corp., a Wholly Owned Subsidiary of CWI, Inc.

 

 

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

“ Deferred Revenues ” means that portion of subscription and membership revenues, product and services revenues and publication revenues carried as a liability by any of the Credit Parties on the balance sheet of that Person, which will be recognized as revenue on that Person’s statement of operations in future periods, all as determined in accordance with GAAP.

 

“ Disposition ” means any sale, assignment, lease, transfer or other disposition of any property (whether now owned or hereafter acquired) by any Credit Party to any other Person excluding (a) the granting of Liens the granting of Liens to the Administrative Agent on behalf of the Purchasers pursuant to the Collateral Documents, and (b) any sale, assignment, transfer or other disposition of (i) any property sold or disposed of in the ordinary course of business and on ordinary business terms, (ii) any property no longer used or useful in the business of the Credit Parties and (iii) any Collateral under and as defined in the Collateral Documents pursuant to an exercise of remedies by the Administrative Agent thereunder.

 

“ Disposition Investment ” means, with respect to any Disposition, any promissory notes or other evidences of indebtedness or Investments received by any Credit Party in connection with such Disposition.

 

“ 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) (a) 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) 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 any extraordinary and unusual gains or losses 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, 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 the Credit Agreement and, commencing with the fiscal year ending December 31, 2009, any costs, expenses or payments made in connection with termination of employees, shall not be deducted in determining operating income, provided, however, that during the term of this Agreement, the aggregate amount (on a cumulative basis) of costs, expenses or payments in connection with the termination of employees not deducted from operating income pursuant to this sentence shall not exceed $1,500,000 in the aggregate.

 

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, 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.

 

“ Effective Date ” means the date on which the conditions specified in Section 5.1 are satisfied (or waived in accordance with Section 10.2).

 

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

 

“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Credit Party directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ Equity Rights ” means, with respect to any Person, any subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including any stockholders’ or voting trust agreements) for the issuance or sale of, or securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, such Person.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a

 

 

determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

“ Event of Default ” has the meaning assigned to such term in Section 8.1.

 

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Purchaser or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income, net worth or franchise taxes or any like taxes imposed on (or measured by) its net income or net worth by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Purchaser, in which its applicable lending office is located or in which it is taxable solely on account of some connection other than the execution, delivery or performance of this Agreement or the receipt of income hereunder, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Purchaser (other than an assignee pursuant to a request by the Borrower under Section 2.18(b)), any withholding tax that is imposed on amounts payable to such Foreign Purchaser at the time such Foreign Purchaser becomes a party to this Agreement or is attributable to such Foreign Purchaser’s failure or inability to comply with Section 2.16(e), except to the extent that such Foreign Purchaser’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16(a).

 

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

 

“ First Lien Administrative Agent ” means the Administrative Agent under the First Lien Credit Agreement.

 

“ First Lien Credit Agreement ” means the First Lien Credit Agreement, dated as of June 24, 2003, as amended by the First Amendment to Credit Agreement dated as of February 18, 2004, the Second Amendment to Credit Agreement dated as of June 30, 2004, the Third Amendment to Credit Agreement dated as of November 12, 2004, the Fourth Amendment to Credit Agreement dated as of March 24, 2005, the Fifth Amendment to Credit Agreement dated as of November 13, 2005, the Sixth Amendment to Credit Agreement dated as of March 3, 2006, the Seventh Amendment to Credit Agreement dated as of June 8, 2006, the Eighth Amendment to Credit Agreement dated as of February 27, 2007, the Ninth Amendment to Credit Agreement dated as of September 8, 2008, and the Tenth Amendment to Credit Agreement dated as of the Effective Date among the Borrower, the guarantors party thereto, the First Lien Purchaser, Canadian Imperial Bank of Commerce, as Syndication Agent and Administrative Agent, and General Electric Capital Corporation, as Documentation Agent.

 

“ First Lien Lenders ” means the Lenders under the First Lien Credit Agreement.

 

 

“ First Lien Loan Documents ” means, collectively, the First Lien Credit Agreement and each other “Loan Document” as defined in the First Lien Credit Agreement.

 

“ First Lien Loan ” means the loans made and letters of credits issued by the First Lien Lenders to the Borrower pursuant to the First Lien Credit Agreement.

 

“ Flood Hazard Property ” means an Additional Mortgaged Property located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

 

“ Foreign Purchaser ” means any Purchaser that is organized under the laws of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“ FRH ” means FreedomRoads Holding Company, LLC, a Minnesota limited liability company, all the common equity of which is held by the Stephen Adams Trust and certain minority holders and all the preferred equity of which is held by CWFR.

 

“ FRH Preferred ” means the rights and preferences of the preferred membership interest in FRH as adopted by the Board of Governors of FRH on the date of issuance of the Holding Company Notes.

 

“ FRH Preferred Equity Interest ” means the membership interest in FRH having the rights and preferences of the FRH Preferred.

 

“ GAAP ” means generally accepted accounting principles in the United States of America.

 

“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government and the National Association of Insurance Commissioners.

 

“ Guarantee ” means a guarantee, an endorsement, a contingent agreement to purchase or to furnish funds for the payment or maintenance of, or otherwise to be or become contingently liable under or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or a guarantee of the payment of dividends or other distributions upon the stock or equity interests of any Person, or an agreement to purchase, sell or lease (as lessee or lessor) property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of such debtor’s obligations or an agreement to assure a creditor against loss, and including, without limitation, causing a bank or other financial institution to issue a letter of credit or other similar instrument for the benefit of another Person, but excluding endorsements for collection or deposit in the ordinary course of business.  The terms “ Guarantee ” and “ Guaranteed ” used as a verb shall have a correlative meaning.

 

“ Guaranteed Obligations ” has the meaning assigned to such term in Section 3.1.

 

 

“ Guarantors ” means the Subsidiaries of the Borrower.

 

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“ Hedging Agreement ” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging agreement.

 

“ Holding Company ” means Affinity Group Holding, Inc., a Delaware corporation which holds all the outstanding capital stock of the Borrower.

 

“ Holding Company Collateral Documents ” means the Nonrecourse Guaranty and Pledge Agreement executed and delivered by the Holding Company on the Effective Date, as such agreement may be amended, supplemented or otherwise modified from time to time.

 

“ Holding Company Notes ” means the Holding Company’s unsecured Senior Notes due 2012 issued pursuant to the Holding Company Notes Indenture in an aggregate principal amount not in excess of the principal amount of the Holding Company Notes issued on the date of initial issuance of the Holding Company Notes (plus any paid in kind interest) which notes are not guaranteed by any of the Credit Parties.

 

“ Holding Company Notes Indenture ” means the Indenture dated as of March 24, 2005 between the Holding Company and The Bank of New York, as Trustee, as supplemented or amended from time to time but excluding any supplement or amendment which increases the interest rate or any premium applicable to the Holding Company Notes, increases the principal amount outstanding of the Holding Company Notes or creates sinking fund or other principal payment or offer to purchase requirements.

 

“ Indebtedness ” means, for any Person: without duplication (a) obligations created, issued or incurred by such Person for borrowed money (whether by Note, advance, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services (other than Phantom Stock Accruals), other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts are payable within 120 days of the date the respective goods are delivered or the respective services are rendered; (c) Capital Lease Obligations of such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (f) Indebtedness of others Guaranteed by such Person; and (g) obligations under Hedging Agreements (and for purposes hereof, the amount of Indebtedness under a Hedging

 

 

Agreement shall be deemed to be equal to the aggregate maximum contingent amount or potential liability under such Hedging Agreement).  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

“ Indemnified Taxes ” means all Taxes other than (a) Excluded Taxes and Other Taxes and (b) amounts constituting penalties or interest imposed with respect to Excluded Taxes or Other Taxes.

 

“ Intercreditor Agreement ” means the Intercreditor Agreement executed and delivered by the Borrower, Canadian Imperial Bank of Commerce, as First Lien Administrative Agent, and the Purchasers on the Effective Date, as such agreement may be amended, supplemented or otherwise modified from time to time.

 

“ Interest Payment Date ” means each Quarterly Date.

 

“ Interest Period ” means the period commencing on either (x) the date of a Borrowing and ending on next succeeding Quarterly Date or (y) a Quarterly Date and ending on the next Succeeding Quarterly Date.

 

“ Investment ” means, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (including, without limitation, any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such short sale); (b) the making of any deposit with, or advance, Note or other extension of credit to, or for the benefit of, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding any such advance, Note or extension of credit having a term not exceeding 180 days representing the purchase price of inventory or supplies sold by such Person in the ordinary course of business); or (c) the entering into of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person.  Notwithstanding the foregoing, Capital Expenditures and Acquisitions shall not be deemed “ Investments ” for purposes hereof.

 

“ IP Collateral ” means, collectively, the Collateral under the Trademark Security Agreement.

 

“ KEYSOP Plan ” means the AGI Holding Corp. Key Employee Security Plan for the benefit of key employees of the Credit Parties.

 

“ Leasehold Property ” means any leasehold interest of any Credit Party as lessee under any lease of real property.

 

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital

 

 

lease or title retention agreement (other than an operating lease) (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“ Liquidation Payment ” has the meaning given to that term in the FRH Preferred and includes any payment made on account of the FRH Preferred Equity Interest as a result of a redemption made pursuant to Section 5 of the FRH Preferred.

 

“ Material Adverse Effect ” means a material adverse effect on (a) the business, assets (including intangible assets), operations or condition (financial or otherwise), of the Credit Parties taken as a whole, (b) the ability of any Credit Party to perform any of its obligations under this Agreement or the other Note Documents or (c) the rights of or benefits available to the Administrative Agent and the Purchasers under this Agreement and the other Note Documents.

 

“ Material Indebtedness ” means Indebtedness (other than the Notes), or obligations in respect of one or more Hedging Agreements, of any one or more of the Credit Parties in an aggregate principal amount exceeding $1,500,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of any Person in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Person would be required to pay if such Hedging Agreement were terminated at such time.

 

“ Material Leasehold Property ” means a Leasehold Property which is of material value as Collateral or of material importance to the operations of the Credit Parties after weighing the value of such property as additional Collateral against the costs and expenses associated with satisfying the requirements of Section 6.13.

 

“ Maturity Date ” means July 31, 2010.

 

“ Mortgage ” means (i) a security instrument (whether designated as a deed of trust or a mortgage, leasehold mortgage, collateral assignment of leases and rents or by any similar title) executed and delivered by any Credit Party in such form as may be approved by the Administrative Agent in its sole discretion, in each case with such changes thereto as may be recommended by Administrative Agent’s local counsel based on local laws or customary local practices, (ii) or at Administrative Agent’s option, in the case of an Additional Mortgaged Property, an amendment to an existing Mortgage, in form satisfactory to Administrative Agent, adding such Additional Mortgaged Property to the Real Property Assets encumbered by such existing Mortgage, in either case as such security instrument or amendment may be amended, supplemented or otherwise modified from time to time.  “ Mortgages ” means all such instruments, including Effective Date Mortgages and any Additional Mortgages, collectively.

 

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“ Net Cash Payments ” means,

 

 

(i)             with respect to any Casualty Event, the aggregate amount of proceeds of insurance, condemnation awards and other compensation received by any Credit Party in respect of such Casualty Event net of (A) reasonable expenses incurred by any Credit Party in connection therewith and (B) contractually required repayments of Indebtedness to the extent secured by a Lien on such property and any income and transfer taxes payable by any Credit Party in respect of such Casualty Event;

 

(ii)            with respect to any Disposition, the aggregate amount of all cash payments received by any Credit Party directly or indirectly in connection with such Disposition, whether at the time of such Disposition or after such Disposition under deferred payment arrangements or Investments entered into or received in connection with such Disposition (including, without limitation, Disposition Investments); provided that

 

(A)           Net Cash Payments shall be net of (I) the amount of any legal, title, transfer and recording tax expenses, commissions and other fees and expenses payable by any Credit Party in connection with such Disposition and (II) any Federal, state and local income or other taxes estimated to be payable by any Credit Party as a result of such Disposition, but only to the extent that such estimated taxes are in fact paid to the relevant Federal, state or local governmental authority within twelve months of the date of such Disposition; and

 

(B)            Net Cash Payments shall be net of any repayments by any Credit Party of Indebtedness to the extent that (I) such Indebtedness is secured by a Lien on the property that is the subject of such Disposition and (II) the transferee of (or holder of a Lien on) such property requires that such Indebtedness be repaid as a condition to the purchase of such property; and

 

(iii)           with respect to any offering of debt or equity securities, the aggregate amount of all cash proceeds received by any Credit Party therefrom less all legal, underwriting and similar fees and expenses incurred in connection therewith.

 

“ Non-Financed Capital Expenditures ” means, for any period, all Capital Expenditures made during such period that have not been funded with the proceeds of purchase money financing (including, without limitations, capital leases) other than the proceeds of the Notes.

 

“ Note Documents ” means this Agreement, the Notes, the Collateral Documents, the Intercreditor Agreement, and any other instruments or documents delivered or to be delivered by any Credit Party or Affiliate thereof from time to time pursuant to this Agreement.

 

“ Notes ” means the notes issued pursuant to this Agreement.

 

“ Other Taxes ” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with

 

 

respect to, this Agreement and the other Note Documents, provided that there shall be excluded from “Other Taxes” all Excluded Taxes.

 

“ Parent ” means AGI Holding Corp., a Delaware corporation which holds all the outstanding capital stock of the Holding Company.

 

“ Paying Agent ” shall have the meaning set forth in the Holding Company Notes Indenture.

 

“ Permitted Investments ” means:

 

(a)            direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

 

(b)            investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard and Poor’s Ratings Service or from Moody’s Investors Service, Inc.;

 

(c)            investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $250,000,000; and

 

(d)            fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above.

 

“ Permitted Tax Distributions ” means, for so long as the Borrower is an “S corporation” or a substantially similar pass-through entity for federal income tax purposes, distributions to the Holding Company (or any successor entity or other entity that owns, directly or indirectly, all of the outstanding common stock of the Borrower) in respect of any fiscal year equal to the amount based on reasonable estimates, of federal, state and local income taxes that the Borrower would be required to pay with respect to such fiscal year calculated as if, for such fiscal year, the Borrower were treated as a “C corporation” domiciled in the State of California rather than as an “S corporation”, and assuming further, solely for the purpose of the tax calculation herein, that any and all Restricted Junior Payments made by the Borrower pursuant to Section 7.6(a)(i) or the interest component of any and all Restricted Junior Payments made by the Borrower pursuant to Section 7.6(a)(iii)(A) shall be deemed to be payments of interest by the Borrower (for avoidance of doubt, any amounts accrued in respect of interest on the Holding Company Notes (but not paid in cash) shall not be treated as payable by the Borrower).

 

 

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“ Phantom Stock Accruals ” means the amounts shown as liabilities in the Borrower’s general ledger account captions “Deferred Phantom Compensation” to the extent (i) such general ledger account is kept and adjusted in the ordinary course of business and in accordance with GAAP and the Borrower’s past practices, and (ii) such deferred compensation is payable under “phantom stock agreements” between a Credit Party and key employees of such Credit Party entered into in the ordinary course of business and in accordance with the Borrower’s practices prior to the effective date thereof, in substantially the form of the phantom stock agreements in existence on the Effective Date, or in such other form as shall be approved by the Administrative Agent.

 

“ Phantom Stock Agreements ” means the phantom stock agreements referred to in the definition of Phantom Stock Accruals and described in Schedule 4.14 annexed hereto.

 

“ Plan ” means any employee benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“ Pledge Agreement ” means the Pledge Agreement executed and delivered by all of the Credit Parties on the Effective Date and thereafter in accordance with Section 6.10, as such agreement may be amended, supplemented or otherwise modified from time to time.

 

“ Property ” means any interest of any kind in property or assets, whether real, personal or mixed, and whether tangible or intangible.

 

“ PTO ” means the United States Patent and Trademark Office or any successor or substitute office in which filings are necessary or, in the opinion of the Administrative Agent, desirable in order to create or perfect Liens on any IP Collateral.

 

“ Purchasers ” means the Persons listed on Schedule 2.1 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.

 

“ Quarterly Dates ” means the last Business Day of each fiscal quarter of the Credit Parties, the first of which shall be the first such day after the Effective Date of this Agreement.

 

“ Real Property Asset ” means, at any time of determination, any fee ownership or leasehold interest then owned by any Credit Party in any real property.

 

“ Register ” has the meaning assigned to such term in Section 10.4(d).

 

 

“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

“ Related Retail Sale-Leaseback Proceeds ” means the proceeds received after the Effective Date by the Credit Parties (net of all transactional and related expenses) in any Sale-Leaseback Transaction involving a Camping World retail outlet or distribution center (excluding any retail outlet or distribution center if the costs for the construction of a structure on such property (including costs of the common building systems) were not funded with Capital Expenditures incurred by the Credit Parties) acquired or constructed by any such party after the Effective Date by the Credit Parties, but only to the extent such proceeds do not exceed the aggregate amount of Capital Expenditures incurred for the purpose of building out such store.

 

“ Required Purchasers ” means, at any time, Purchasers having Notes representing more than 50% of the sum of the total Notes at such time.

 

“ 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, (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.

 

“ Sale-Leaseback Transactions ” means any sales or transfers of any real or tangible personal property owned by any Person in order to lease such property for substantially the same purpose as the property being sold or transferred; provided that such sale or transfer is at fair market value and such lease is at fair rental value.

 

“ Sarbanes-Oxley Act ” has the meaning assigned to such term in Section 6.1(a).

 

“ Security Agreement ” means the Security Agreement executed and delivered by all of the Credit Parties on the Effective Date and thereafter in accordance with Section 6.10, as such agreement may be amended, supplemented or otherwise modified from time to time.

 

“ Senior Debt ” means the Indebtedness of the Credit Parties as described in clauses (a), (b), (c) and (d) of the definition of “Indebtedness” (determined on a consolidated basis without duplication in accordance with GAAP), excluding any Subordinated Indebtedness.

 

“ Senior Principal Refunding Payment ” has the meaning assigned to such term in the First Lien Credit Agreement.

 

“ Senior Subordinated Notes ” means the Borrower’s 9.00% Senior Subordinated Notes due 2012, including any Additional Notes and Exchange Notes (as each such

 

 

term is defined in the Senior Subordinated Note Indenture) with an aggregate initial principal amount equal to $200,000,000, in each case as issued pursuant to the Senior Subordinated Note Indenture, as amended, supplemented or otherwise modified in accordance with the restrictions of Section 7.12.

 

“ Senior Subordinated Note Indenture ” means that certain Indenture dated as of February 18, 2004 among the Borrower, the guarantors party thereto and The Bank of New York, as trustee, as amended, supplemented or otherwise modified in accordance with the restrictions of Section 7.12.

 

“ Subordinated Indebtedness ” means (a) the Senior Subordinated Notes and (b) any Indebtedness of any Credit Party which matures in its entirety later than the Notes and by its terms (or by the terms of the instrument under which it is outstanding and to which appropriate reference is made in the instrument evidencing such Subordinated Indebtedness) is made subordinate and junior in right of payment to the Notes and to such Credit Party’s other obligations to the Purchasers hereunder by provisions reasonably satisfactory in form and substance to the Administrative Agent.

 

“ Subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  References herein to “ Subsidiaries ” shall, unless the context requires otherwise, be deemed to be references to Subsidiaries of the Borrower.

 

“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

 

“ Trademark Security Agreement ” means the Trademark Security Agreement executed and delivered by all of Credit Parties on the Effective Date and thereafter in accordance with Section 6.10, as such agreement may be amended, supplemented or otherwise modified from time to time.

 

“ Transactions ” means (a) with respect to the Borrower, the execution, delivery and performance by the Borrower of the Note Documents to which it is a party, the issuance of the Notes and the use of the proceeds thereof and (b) with respect to any Credit Party (other than the Borrower), the execution, delivery and performance by such Credit Party of the Basic Documents to which it is a party.

 

“ UCC ” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

 

“ U.S. dollars ” or “ $ ” refers to lawful money of the United States of America.

 

 

“ Wholly Owned Subsidiary ” means, with respect to any Person at any date, any corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing 100% of the equity or ordinary voting power (other than directors’ qualifying shares) or, in the case of a partnership, 100% of the general partnership interests are, as of such date, directly or indirectly owned, controlled or held by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.

 

“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

“ Working Capital ” means, at any date, the difference between the aggregate current assets and the aggregate current liabilities (excluding current maturities of long term Indebtedness, the current portion of Deferred Revenues and the current portion of deferred tax assets and deferred tax liabilities) of the Credit Parties at such date (determined on a consolidated basis without duplication in accordance with GAAP).

 

1.2            Terms Generally .  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.  References in Articles VI and VII in respect of the affirmative and negative covenants to be performed by the Credit Parties shall be interpreted to mean, with respect to Article VI, that the Borrower will, and will cause each of its Subsidiaries to comply with such covenant, and, with respect to Article VII, that the Borrower will not, and will not permit any of its Subsidiaries to, violate such covenant.

 

1.3            Accounting Terms; GAAP .  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Purchasers request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given

 

 

before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

ARTICLE II
Purchase of Notes

 

2.1            Funding .  On the Effective Date, the Borrower will borrow, and the Purchasers will lend to the Borrower, the aggregate principal sum of $9,716,666.67.  All such indebtedness shall be evidenced by, and is to be repaid according to the terms of, one or more Notes.  The entire principal sum of $9,716,666.67 will be advanced on the Effective Date.

 

2.2            Repayment of Notes .  All unpaid principal amounts and accrued and unpaid interest under the Notes, and all other Obligations of the Borrower to the Purchasers due and owing hereunder shall be paid upon the earliest of (a) the date of acceleration of the Notes pursuant to Article VII, (b) the date of redemption pursuant to this Article II and (c) the Maturity Date.

 

2.3            Interest on the Notes.  The Notes shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 days) at nine percent (9.0%) per annum (the “Interest Rate”) and interest shall be payable in accordance with, the Notes.

 

2.4            Prepayment of the Notes.

 

(a)            Optional Prepayments .  At any time following the First Priority Obligations Payment Date (as defined in the Intercreditor Agreement), the Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, subject to prior notice in accordance with paragraph (d) of this Section 2.4; provided that each prepayment in respect of the Notes shall be in an amount that is at least equal to $1,000,000 or any greater multiple of $500,000.

 

(b)            Mandatory Prepayments .  At any time following the First Priority Obligations Payment Date (as defined in the Intercreditor Agreement), subject to the provisions of subsection (i) below, the Borrower shall make prepayments of the Notes hereunder as follows:

 

(i)             Casualty Events .  Upon the date 90 days following the receipt by any Credit Party of the proceeds of insurance, condemnation award or other compensation in respect of any Casualty Event affecting any property of any Credit Party (or upon such earlier date as such Credit Party, as the case may be, shall have determined not to repair or replace the property affected by such Casualty Event), the Borrower shall prepay the Notes in an aggregate amount, if any, equal to 100% of the Net Cash Payments from such Casualty Event not theretofore applied or committed to be applied to the repair or replacement of such property (it being understood that if Net Cash Payments committed to be applied are not in fact applied within twelve months of the respective Casualty Event, then such proceeds shall be applied to the prepayment of Notes as provided in this subsection (i)

 

 

at the expiration of such twelve-month period), such prepayment and reduction to be effected in each case in the manner and to the extent specified in Section 2.4(c).

 

(ii)            Offering of Debt or Equity .  Without limiting the obligation of the Borrower to obtain the consent of the Required Purchasers to any incurrence of Indebtedness or sale of securities not otherwise permitted hereunder, the Borrower agrees, on or prior to the closing of any sale of debt or equity securities by any Credit Party after the Effective Date, to deliver to the Administrative Agent a statement certified by a Financial Officer of the Borrower, in form and detail reasonably satisfactory to the Administrative Agent, of the estimated amount of the Net Cash Payments of such sale of securities that will (on the date of such sale of securities) be received by any Credit Party in cash and the Borrower will prepay the Notes hereunder, upon the date of such sale of securities, in an aggregate amount equal to (x) in the case of a sale of equity securities, 50% of the actual amount of the Net Cash Payments of such sale of equity securities received by any Credit Party in an aggregate amount in excess of $10,000,000 in any fiscal year, and (y) in the case of the incurrence of Indebtedness (other than Indebtedness incurred under Section 7.1(f)), 100% of the actual amount of the Net Cash Payments of such incurrence of Indebtedness received by any Credit Party, in each case, such prepayment to be effected in each case in the manner and to the extent specified in Section 2.4(c); provided that, notwithstanding the foregoing (q) in the event any Credit Party receives Net Cash Payments from the incurrence of Senior Subordinated Notes, the amount of the Notes required to be prepaid pursuant to this Section 2.4(b)(ii) shall be equal to the Holding Company Notes Borrower Refinancing Payment and (r) in the event the Holding Company receives Net Cash Payments from the incurrence of Holding Company Notes Refinancing Indebtedness, the amount of the Notes required to be prepaid pursuant to this Section 2.4(b)(ii) shall be equal to the Holding Company Notes Refinancing Payment.  Notwithstanding the foregoing to the contrary, upon the consummation of the Camping World Financing, the Borrower shall make a Senior Principal Refunding Payment (as defined in the First Lien Credit Agreement) on principal amount of the Notes hereunder in an aggregate amount not less than the greater of $18,500,000 or the Net Cash Payments of the Camping World Financing.

 

(iii)           Sale of Assets .  Without limiting the obligation of the Borrower to obtain the consent of the Required Purchasers to any Disposition not otherwise permitted hereunder, the Borrower agrees, on or prior to the occurrence of any Disposition (other than a Sale-Leaseback Transaction) by any Credit Party, to deliver to the Administrative Agent a statement certified by a Financial Officer of the Borrower, in form and detail reasonably satisfactory to the Administrative Agent, of the estimated amount of the Net Cash Payments of such Disposition that will (on the date of such Disposition) be received by any Credit Party in cash, indicating on such certificate, whether the Borrower intends to reinvest such Net Cash Payments or will be prepaying the Notes, as hereinafter provided, and the Borrower will be obligated to either (A) reinvest such Net Cash Payments within 180 days after receipt (or, if within such 180 day period the Borrower or any Credit Party

 

 

enters into contracts related to the reinvestment of such Net Cash Payments, such longer period not to exceed 365 days after the original date of receipt of such Net Cash Payments as is contemplated by such contracts) into assets used in a line of business permitted hereunder or (B) prepay the Notes hereunder as follows:

 

(x)             upon the date of such Disposition, or on the date (the “ Reinvestment Date ”) which is 180 days after such date (or such longer period not to exceed 365 days as contemplated by contracts related to the reinvestment of such Net Cash Payments) if the Borrower had indicated on the certificate delivered as hereinabove required that it intended to reinvest the Net Cash Payments of such Disposition, in an aggregate amount equal to 100% of the amount of such Net Cash Payments, to the extent received by any Credit Party in cash on the date of such Disposition or, if applicable, the Reinvestment Date to the extent of any Net Cash Payments not so reinvested; and

 

(y)            thereafter, quarterly, on the date of the delivery by the Borrower to the Administrative Agent pursuant to Section 6.1 of the financial statements for any quarterly fiscal period or fiscal year, to the extent any Credit Party shall receive Net Cash Payments during the quarterly fiscal period ending on the date of such financial statements in cash under deferred payment arrangements or Disposition Investments entered into or received in connection with any Disposition, an amount equal to (A) 100% of the aggregate amount of such Net Cash Payments minus (B) any transaction expenses associated with Dispositions and not previously deducted in the determination of Net Cash Payments plus (or minus , as the case may be) (C) any other adjustment received or paid by any Credit Party pursuant to the respective agreements giving rise to Dispositions and not previously taken into account in the determination of the Net Cash Payments; provided that if prior to the date upon which the Borrower would otherwise be required to make a prepayment under this clause (y) with respect to any quarterly fiscal period the aggregate amount of such Net Cash Payments (after giving effect to the adjustments provided for in this clause (y)) shall exceed $4,000,000, then the Borrower shall within three Business Days make a prepayment under this clause (y) in an amount equal to such required prepayment.

 

Prepayments of Notes shall be effected in each case in the manner and to the extent specified in Section 2.4(c); provided that if at the time of any such Disposition an Event of Default shall have occurred and be continuing, the Credit Parties shall not have the right to reinvest any Net Cash Payments and shall instead prepay the Notes by 100% of the amount of Net Cash Payments received from such Disposition.

 

Anything herein to the contrary notwithstanding, except as provided in the succeeding sentence, the Borrower shall not be required to make any

 

 

prepayment pursuant to this clause (iii) with respect to the first $10,000,000 of Net Cash Payments from any Disposition which are not reinvested pursuant to this clause (iii).  Notwithstanding the preceding sentence or anything herein to the contrary if and to the extent that any Net Cash Payments would otherwise be required to be used to repay the Senior Subordinated Notes or the Holding Company Notes or purchase or repurchase any notes issued under the Senior Subordinated Notes Indenture or the Holding Company Notes Indenture, the Borrower shall prepay the Notes as provided in clause (B) above.

 

(c)            Application . In the event of any mandatory prepayment of Notes pursuant to subsections (b)(i) through (b)(iii) of this Section 2.4, the proceeds of such prepayment shall be applied in payment of the Notes on a pro rata basis.

 

(d)            Notification of Prepayments .  The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder not later than 11:00 a.m., New York, New York time, three Business Days before the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid.

 

2.5            Taxes .

 

(a)            Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.5) the Administrative Agent or any Purchaser (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)            In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)            The Borrower shall indemnify the Administrative Agent and each Purchaser, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.5) paid or payable by the Administrative Agent or such Purchaser, as the case may be (and any penalties, interest and reasonable expenses arising therefrom or with respect thereto during the period prior to the Borrower making the payment demanded under this paragraph (c)), whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Purchaser, or by the Administrative Agent on its own behalf or on behalf of a Purchaser, shall be conclusive absent manifest error.

 

(d)            As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such

 

 

Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)            Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.

 

2.6            Payments Generally: Pro Rata Treatment; Sharing of Set-Offs.

 

(a)            The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or under Section 2.5 or otherwise) prior to 12:00 noon, New York, New York time, on the date when due, in immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Purchaser pursuant to the wire transfer instructions provided to the Borrower on the date of this Agreement or as otherwise provided from time to time by written notice to the Borrower.

 

ARTICLE III

Guarantee by Guarantors

 

3.1            The Guarantee .  Each Guarantor hereby jointly and severally guarantees to each Purchaser and the Administrative Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Notes made by the Purchasers to the Borrower and all other amounts from time to time owing to the Purchasers or the Administrative Agent by the Borrower hereunder or under any other Note Document, and all obligations of the Borrower to any Purchaser under any Hedging Agreement or arising from or related to cash management services, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the “ Guaranteed Obligations ”).  Each Guarantor hereby further agrees that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, each Guarantor will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

3.2            Obligations Unconditional .  The obligations of each Guarantor under Section 3.1 are absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of this Agreement, the other Note Documents or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations,

 

 

and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 3.2 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances.  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder which shall remain absolute and unconditional as described above:

 

(i)             at any time or from time to time, without notice to such Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

 

(ii)            any of the acts mentioned in any of the provisions hereof or of the other Note Documents or any other agreement or instrument referred to herein or therein shall be done or omitted;

 

(iii)           the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right hereunder or under the other Note Documents or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or

 

(iv)           any lien or security interest granted to, or in favor of, the Administrative Agent or any Purchaser or Purchasers as security for any of the Guaranteed Obligations shall fail to be perfected.

 

The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Purchaser exhaust any right, power or remedy or proceed against the Borrower hereunder or under the other Note Documents or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.

 

3.3            Reinstatement .  The obligations of each Guarantor under this Article III shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each of the Guarantors agrees that it will indemnify the Administrative Agent and each Purchaser on demand for all reasonable costs and expenses (including fees and expenses of counsel) incurred by the Administrative Agent or any Purchaser in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

 

 

3.4            Subrogation .  Each Guarantor hereby waives all rights of subrogation or contribution, whether arising by contract or operation of law (including, without limitation, any such right arising under the Federal Bankruptcy Code of 1978, as amended) or otherwise by reason of any payment by it pursuant to the provisions of this Article III and further agrees with the Borrower for the benefit of each of its creditors (including, each Purchaser and the Administrative Agent) that any such payment by it shall constitute a contribution of capital by such Guarantor to the Borrower.

 

3.5            Remedies .  Each Guarantor agrees that, as between such Guarantor and the Purchasers, the obligations of the Borrower hereunder may be declared to be forthwith due and payable as provided in Section 8.1 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 8.1) for purposes of Section 3.1 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by such Guarantor for purposes of Section 3.1.

 

3.6            Instrument for the Payment of Money .  Each Guarantor hereby acknowledges that the guarantee in this Article III constitutes an instrument for the payment of money, and consents and agrees that any Purchaser or the Administrative Agent, at its sole option, in the event of a dispute by the Guarantors in the payment of any moneys due hereunder, shall have the right to summary judgment or such other expedited procedure as may be available for a suit on a note or other instrument for the payment of money.

 

3.7            Continuing Guarantee .  The guarantee in this Article III is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising.

 

3.8            Rights of Contribution .  The Guarantors hereby agree, as between themselves, that if any Guarantor shall become an Excess Funding Guarantor (as defined below) by reason of the payment by such Guarantor of any Guaranteed Obligations, each other Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor an amount equal to such Guarantor’s Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, debts and liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations.  The payment obligation of a Guarantor to any Excess Funding Guarantor under this Section 3.8 shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Guarantor under the other provisions of this Article III and such Excess Funding Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations.

 

For purposes of this Section 3.8, (i) “ Excess Funding Guarantor ” means, in respect of any Guaranteed Obligations, a Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “ Excess Payment ” means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (iii) “ Pro Rata Share ” means, for any Guarantor, the ratio (expressed as a percentage) of (x) the

 

 

amount by which the aggregate present fair saleable value of all properties of such Guarantor (excluding any shares of stock of, or ownership interest in, any other Guarantor) exceeds the amount of all the debts and liabilities of such Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder and any obligations of any other Guarantor that have been Guaranteed by such Guarantor) to (y) the amount by which the aggregate fair saleable value of all properties of all of the Credit Parties exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of the Borrower and the Guarantors hereunder and under the other Note Documents) of all of the Credit Parties, determined (A) with respect to any Guarantor that is a party hereto on the Effective Date, as of the Effective Date, and (B) with respect to any other Guarantor, as of the date such Guarantor becomes a Guarantor hereunder.

 

3.9            General Limitation on Guarantee Obligations .  In any action or proceeding involving any state or non-U.S. corporate law, or any state or Federal or non-U.S. bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 3.1 would otherwise, taking into account the provisions of Section 3.8, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 3.1, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Purchaser, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

 

ARTICLE IV

 

Representations and Warranties

 

Each of the Credit Parties represents and warrants to the Purchasers and the Administrative Agent, as to itself and each other Credit Party, that:

 

4.1            Organization; Powers .  Each Credit Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.  Each Credit Party has all requisite power and authority under its organizational documents to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

 

4.2            Authorization; Enforceability .  The Transactions are within the corporate power of each Credit Party and have been duly authorized by all necessary corporate and, if required, stockholder action on the part of such Credit Party.  This Agreement, the Collateral Documents, and the other Note Documents have been duly authorized, executed and delivered by each Credit Party that is a party thereto and constitute legal, valid and binding obligations of such Credit Party, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

 

4.3            Governmental Approvals; No Conflicts .  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, (b) will not violate any applicable law, policy or regulation or the charter, by-laws or other organizational documents of any Credit Party or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Credit Party, or any of its assets, or give rise to a right thereunder to require any payment to be made by any Credit Party, and (d) except for the Liens created by the Collateral Documents, will not result in the creation or imposition of any Lien on any asset of the Credit Parties.

 

4.4            Financial Condition; No Material Adverse Change

 

(a)            The Borrower shall have delivered to the Purchasers the following financial statements:

 

(i)             the audited consolidated balance sheet and statements of earnings (loss), stockholders’ deficit and cash flows of the Holding Company and its Subsidiaries as of and for the fiscal year ended December 31, 2008, accompanied by an opinion of Ernst & Young LLP, independent public accountants (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit); and

 

(ii)            the unaudited consolidated and consolidating statements of income, retained earnings and cash flows of the Credit Parties for the month most recently ended and f