CONSULTING AND NONCOMPETITION AGREEMENT
THIS CONSULTING AND NONCOMPETITION AGREEMENT (the "Agreement") is made as
of the ____ day of ________, 1997, by and among XXXXXX X. XXXXXXXX ("XXX"),
AFFINITY GROUP, INC., a Delaware corporation ("AGI"), and CAMPING WORLD, INC., a
Kentucky corporation (the "Company").
R E C I T A L S
WHEREAS, pursuant to that certain Stock Purchase Agreement (the "Stock
Purchase Agreement") dated as of February 25, 1997, AGI is purchasing all of the
issued and outstanding shares of capital stock of the Company) (AGI, the
Company and any affiliated entity to which the assets and liabilities of the
Company are subsequently transferred are hereinafter referred to individually as
a "Company Party" and collectively as the "Company Parties"). All capitalized
terms used herein and not otherwise defined herein shall have the meanings given
them in the Stock Purchase Agreement; and
WHEREAS, TAD possesses confidential information, trade secrets and special
knowledge of the Company, the Business and the Assets; and
WHEREAS, the execution by TAD of this Agreement is a condition precedent to
the obligation of AGI to consummate the transactions contemplated under the
Stock Purchase Agreement; and
WHEREAS, benefits will accrue to TAD under this Agreement as well as by
reason of the closing of the transactions contemplated under the Stock Purchase
Agreement and TAD is desirous that such transactions be consummated;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. CONSULTING SERVICES. During the Covenant Period (as defined below),
TAD will be available at reasonable times upon reasonable notice to advise the
Company Parties and consult with senior management regarding the Business.
After the first five years of the Covenant Period, the services of TAD hereunder
shall be as mutually agreed upon between the parties hereto, and TAD shall be
entitled to reimbursement from time and expenses as approved by the parties
hereto in advance of the provision for such services by TAD.
2. COVENANT NOT TO COMPETE.
(a) COVENANT PERIOD. TAD hereby covenants that, for a period of
fifteen (15) years from the date of this Agreement (the "Covenant Period"),
TAD shall not, directly
or indirectly, be engaged or have an ownership interest in any business that
is in competition with or that would result in a conflict of interest with
the Company Parties or the development, marketing, provision, installation or
sale by the Company Parties of the products or services being developed,
marketed, provided, installed or sold by the Company Parties as of the date
of this Agreement, including, but not limited to, club memberships to
selected recreational affinity groups, specialty retail recreational vehicle
merchandise distributed primarily through retail supercenters and mail order
catalogs, and subscription magazines and directories; provided, however, that
ownership by TAD of less than five percent (5%) of the issued and outstanding
capital stock of any corporation whose securities are listed on a national
securities exchange or are regularly included in the national list of
over-the-counter securities from time to time published in a newspaper or
other general publication shall not be deemed to violate the prohibitions of
this paragraph; and further, provided, that upon the expiration of the first
five (5) years of the Covenant Period, the provisions of this Section 2(a)
shall only be construed to prohibit TAD from engaging in the activity
described herein in North Dakota and South Dakota.
(b) NO INTERFERENCE WITH EMPLOYEES. TAD agrees that during the first
five years of the Covenant Period, TAD will not offer employment to, discuss the
nature of any prospective employment opportunities with, or otherwise solicit
any employee of any Company Party (or any person who was an employee of a
Company Party within 180 days of the date hereof) on TAD's own behalf or on
behalf of any entity with which any such party is acting as a consultant or with
which TAD is then otherwise affiliated.
(c) DISCLOSURE. TAD agrees that he will not at any time disclose to
any person, partnership or other entity who or which is in competition with the
Company Parties, any confidential information or trade secrets of the Company
Parties, the contents of any customer lists of the Company Parties or the
general needs of the customers or other contracting parties with the Company
Parties, provided, however, the foregoing shall not prevent TAD from responding
to the request of a governmental agency or pursuant to court order or as
otherwise required by law nor from disclosing information obtained by TAD from a
third party without violation of this Agreement or information otherwise in the
public domain.
3. CONSIDERATION. In consideration of the covenants and agreements of
TAD contained herein, the Company Parties shall pay to TAD the following
amounts, all of which shall be paid by wire transfer of immediately available
funds to an account specified by TAD:
(a) $1,750,000, payable upon execution of this Agreement;
(b) $1,960,000, on the fifth anniversary of the date of this
Agreement; and
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(c) Interest on the outstanding balance of the amount payable
pursuant to subsection (b) above at the rate of 10% per annum, such interest to
be paid annually on each anniversary of the date of this Agreement until such
amount has been paid in full.
(d) The amount payable hereunder may be prepaid in whole or in part
at any time by the Company Parties in their sole discretion. In the event of
any prepayment of the entire balance due hereunder, the amount due and payable
by the Company Parties shall be as follows:
(i) If the full prepayment occurs on or before the date that is
30 days after the date hereof, the full prepayment amount shall be
$1,680,000, plus accrued interest pursuant to subsection (c) above.
(ii) If the full prepayment occurs on a date that is more than 30
days after the date hereof, the amount due and payable thereafter
shall increase by $4,666.67 for each month (pro rated for any part
thereof) after the date that is 30 days after the date hereof until
the amount due hereunder is paid in full.
4. OFFSET RIGHTS. Any payments due and not yet paid hereunder shall be
subject to setoff claims of AGI for breaches by the Sellers of their covenants,
representations or warranties contained in the Stock Purchase Agreement. In the
event of any claim by AGI for indemnity under the terms of the Stock Purchase
Agreement, payments due under this Agreement shall be reduced by the amount of
such claim (as finally determined by litigation or otherwise), effective as of
the date on which such claim was made.
5. DEFAULT. In the event that the Company Parties should default in
the payment of any payment under Section 3, then the amount not paid when due
shall bear interest from the date of default at the rate per annum of 10% in
excess of the rate identified from time to time in the WALL STREET JOURNAL as
the prime rate of interest, but not to exceed the highest maximum rate
allowable under applicable law.
6. MISCELLANEOUS.
(a) The invalidity or unenforceability of any provision of this
Agreement 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 circumstances. Any
provision of this Agreement 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.
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(b) This Agreement shall be governed by the laws of the State of
Delaware, without regard to its conflict of laws rules.
(c) This Agreement may not be assigned by TAD or the Company Parties
without the prior written consent of the other parties. This Agreement and the
rights and the obligations hereunder shall be binding upon and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and assigns.
(d) The Company Parties acknowledge that the benefits to be derived
from TAD's covenants under this Agreement will be realized for all periods
during which payments are due hereunder notwithstanding the death, disability or
incapacity of TAD, and therefore, the obligation of the Company Parties to make
payments hereunder shall continue regardless of the death, disability or
incapacity of TAD. In such event, any payments due hereunder shall be made to
TAD's legal representative.
(e) This Agreement, together with the Stock Purchase Agreement and
the agreements, documents and instruments delivered in connection therewith
embodies the entire agreement of the parties hereto relating to the subject
matter hereof. No amendment or modification of this Agreement shall be valid or
binding upon any party hereto unless made in writing and signed by such party.
(f) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
AFFINITY GROUP, INC.
By: illegible
--------------------------------
Its: Vice President
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CAMPING WORLD, INC.
By: illegible
--------------------------------
Its: Vice President
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