EXHIBIT 10.37
Purchase Agreement for AGI Real Estate Holding, Inc. dated November 1, 1998
between Xxxxxxx Xxxxx and AGI.
[TYPED ON XXXXXXX XXXXX LETTERHEAD]
November 1, 1998
Xx. Xxxx X. Xxxxxxx
Senior Vice President and CFO
Affinity Group, Inc.
00 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Re: AGI Real Estate Holding, Inc. (the "Company")
Dear Xxxx:
Affinity Group, Inc. ("AGI") is in the process of refinancing its long-term debt
with a new $200 million bank facility led by Fleet Bank (the "Refinancing"). In
connection with the Refinancing, you have advised me that it is intended that
AGI acquire the shares of the Company and that, accordingly, AGI own directly,
through a subsidiary of AGI, the real estate that it currently leases from the
Company.
I have an option to acquire all of the issued and outstanding shares of stock of
the Company as confirmed in a letter agreement dated as of June 30, 1995 (the
"Option Agreement). In connection with the Refinancing, the real estate owned
by the company has been appraised at $11,750,000. The Company has indebtedness
outstanding to Sunlife Assurance Company of Canada (US), a Delaware corporation
(the "Mortgage Lender"). With accrued interest, as of November 13, 1998, the
anticipated date of the closing of the Refinancing, the amount due to the
Mortgage Lender will be $2,413,242. The Company has no other liabilities (other
than the lease between the Company and AGI).
You have requested that I assign my rights under the Option Agreement to you. I
have indicated my willingness to do so provided that you pay to me the amount
equal of the appraised value of the real estate owned by the Company less the
sum of (i) the amount due to the Mortgage Lender and (ii) the amount required to
be paid to exercise the option granted pursuant to the Option Agreement.
This letter will confirm my assignment of my rights under the Option Agreement
to you in consideration of your agreement to pay me the amount of $9,336,758
contemporaneously with
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the closing of the Refinancing. If the Refinancing does not occur on or
before December 15, 1998, the assignment set forth herein shall be null and
void.
If the foregoing properly sets forth our understanding in respect of the
assignment of my rights under the Option Agreement to you, I would appreciate
your so evidencing by executing the counterpart of this letter which is
included for that purpose.
Very truly yours,
/s/ Xxxxxxx Xxxxx
-----------------------------
Xxxxxxx Xxxxx
Accepted and agreed to as of November 1, 1998.
AFFINITY GROUP, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xx. Xxxx X. Xxxxxxx
Senior Vice President and CFO
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