ASSIGNMENT AND ASSUMPTION OF LICENSE
ASSIGNMENT AND ASSUMPTION OF LICENSE, made as of the 30 day of
September, 1996 (this "Agreement"), by and between COLBERT BALLARD GOLF
LEARNING CENTERS, INC., a Nevada corporation having an address at 00000 X. Xxx
Xxxx, Xxxxxxx, Xxxxxxxx 00000 ("Assignor"), and C.B. FAMILY GOLF CENTERS,
INC., a Delaware corporation having an address at 000 Xxxxxxxxxxx Xxxx, Xxxxx
000X, Xxxxxxxx, Xxx Xxxx 00000 ("Assignee").
W I T N E S S E T H :
WHEREAS, by License, (the "License") by and between Xxxxx Xxxxxxx, Xxxxx
Xxxxxxx (collectively, the "Licensors") and Assignor, Assignor was granted the
license to use the Licensors' names and teaching system (the "Licensed
Property");
WHEREAS, Assignor desires to assign to Assignee its entire interest as
licensee under the License and Assignee desires to accept such assignment and
assume Assignor's obligations under the License on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of TEN ($10.00) DOLLARS, the terms and
conditions set forth herein, and other good and valuable consideration, the
mutual receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree to the foregoing and as follows:
1. Assignment and Assumption. Effective as of July 15, 1996 (the
"Effective Date") Assignor assigns, sets over and transfers to Assignee all
right, title and interest of Assignor in and to the License, and Assignee
assumes and agrees to perform any and all of the obligations to be performed
by the Assignor under the License (as if Assignee executed the License
originally as licensee thereunder) accruing from and after the Effective Date.
Assignee further agrees to be bound by and fully responsible for all of the
covenants, agreements, terms, provisions, and conditions of Assignor under the
License to be performed by Assignor from and after the Effective Date.
Assignee agrees that the obligations assumed hereunder and agreements
contained herein shall benefit the Licensors and their successors and assigns
as well as Assignor.
2. Xxxx of Sale. Assignor does hereby sell, assign, transfer and convey
to Assignee, and Assignee does hereby purchase and acquire from Assignor, all
of Assignor's right, title and interest in and to the following property
(collectively, the "Property"):
2.1 all personalty, inventories, supplies, sales, marketing and
instructional materials of every kind and description relating to the use of
the Licensed Property by the Assignor (the "Business"), wherever located,
including without limitation, the items described on Exhibit B attached hereto
and made a part hereof (the "Personal Property");
2.2 the files, books, notices and other correspondence from any
governmental agencies, and other records used or employed by Assignor or its
affiliates in connection with the ownership and/or operation of the Business
(collectively, the "Records");
2.3 any consents, authorizations, variances, waivers, licenses,
certificates, permits and approvals held by or granted to Assignor in
connection with the ownership of the Business (collectively, the "Permits");
2.4 the contracts, leases and other agreements of or relating to
the operation of the Business described on Exhibit C attached hereto and made
a part hereof (the "Contracts");
2.5 any patents, trademarks, servicemarks, trademark or servicemark
registrations, copyrights, copyright registrations, trade names and all
registrations thereof and all applications for any of the foregoing, whether
issued or pending, if any, and all goodwill associated with any of the
foregoing, including, but not limited to, the service xxxx "perfect practice"
and the name "Colbert Ballard Golf Learning Centers" (the "Intangible
Assets"); and
2.6 any other properties and assets of every kind and nature, real
or personal, tangible or intangible, relating in any way whatsoever to the
Business, except to the extent the same relate solely to the Retained Assets
or Retained Liabilities.
3. Assets to be Retained by Assignor. Anything herein to the contrary
notwithstanding, Assignor shall not sell, and
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Assignee shall not acquire, the following assets of Assignor (the "Retained
Assets"):
3.1 any rights of Assignor with respect to insurance
policies owned by Assignor or for which Assignor is the named
insured; and
3.2 all cash, funds in bank accounts and cash equivalents existing
as of the date hereof.
4. Assumption of Certain Liabilities. Assignee shall
assume and agree to pay and discharge when due all liabilities and
obligations of Assignor under:
4.1 the License, to the extent the same arise from and
after the date hereof;
4.2 the Contracts, to the extent the same arise from
and after the date hereof; and
4.3 the liabilities listed on Exhibit D hereto (the
"Assumed Liabilities").
4.4 Assignor shall retain, and Assignee shall not assume, perform,
discharge or pay, and shall not be responsible for, any and all liabilities or
obligations of any nature whatsoever in connection with or relating to the
Assignor or the Business or any predecessor owner of the Business other than
the Assumed Liabilities (collectively, the "Retained Liabilities").
5. Consideration.
5.1 In consideration for the assignment of the License,
Assignee shall:
(a) cause Family Golf Centers, Inc., a Delaware corporation
(the "Parent") to issue 7,000 validly issued, fully paid and non-assessable
shares of common stock, par value $.01 per share, of Parent (the "Common
Stock") free and clear of all liens, claims and encumbrances and to deliver at
Closing: (1) a certificate representing 4,550 shares of Common Stock
registered in the name of "Colbert Ballard Golf Learning Centers, Inc.", and
(2) a certificate representing the 2,450 shares of Common Stock
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registered in the name of Continental Stock Transfer and Trust Company, as
escrow agent, to be held and distributed in accordance with the provisions of
the Escrow Agreement, dated as of even date herewith;
(b) assume the Assumed Liabilities listed on Exhibit D hereto.
5.2 The parties agree that, given the restrictions on the Common
Stock, the price at which the shares of common stock of Parent are trading on
the NASDAQ exchange on the Closing Date may not be an accurate measure of the
value of the Common Stock. Therefore, in order to properly prepare transfer,
gains, sales, income and other tax and similar forms, the parties have agreed
that a fair and reasonable valuation of the Common Stock as of the Closing
Date is $25 per share.
6. Apportionments.
6.1 The parties hereto agree that (i) all compensation payable to
the Licensors under the License and all other operating expenses of Assignor
relating to the Business (i.e., advertising, collections, fees, hired
services, insurance, miscellaneous expenses, postage, repairs and maintenance,
supplies, taxes, utilities, wages and interest on indebtedness, but
specifically not including professional fees and expenses, travel and lodging
or depreciation), and (ii) all income of Assignor, including accounts
receivable, shall be apportioned between Assignor and Assignee as of the
Effective Date based on the portion of each such expense or revenue
attributable to the period falling on or before the Effective Date on the one
hand, which Assignor shall bear the responsibility and benefit of, and the
portion of each such expense or revenue attributable to the period falling
after the Effective Date, on the other hand, which Assignee shall bear the
responsibility and benefit of (the "Adjustment"). The net Adjustment will be
paid by the party owing the same to the other in cash or by certified or
official bank check or wire transfer. The expenses and liabilities for which
Assignor shall be liable pursuant to this Section shall be included within the
meaning of the term "Retained Liabilities".
6.2 To the extent that any of the prorations made pursuant to this
Article are based upon estimates of payments to be made and/or expenses to be
incurred by Assignee subsequent to the Effective Date, or either party
discovers any errors in or
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omissions in respect of the Adjustment, Assignor and Assignee agree to adjust
such prorations promptly upon receipt by Assignor or Assignee, as the case may
be, of such payments or of bills or other documentation setting forth the
actual amount of such expenses.
6.3 Assignor and Assignee shall maintain and make available to each
other any books or records necessary for the adjustment of any item pursuant
to this Article. The provisions of this Article shall survive the closing of
the transactions described herein (the "Closing").
7. Loan to Assignor. The Assignee hereby agrees to lend
the Assignor $446,720.00 to pay certain Retained Liabilities of
the Assignor listed on Exhibit E hereto, in exchange for a secured
promissory note made by the Assignor in favor of the Assignee in
the face amount of $446,720.00, which note shall be personally
guaranteed by Xxxxx X. Xxxxxxxxx and Xxxxxxx Xxxxxxxxx.
8. Representations and Warranties of Assignor. Assignor
hereby represents and warrants to Assignee as follows:
8.1 Organization; Power and Authority. Assignor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, and has all requisite power and authority to carry on its
business as it is now being conducted, to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
8.2 Due Authorization and Execution; Effect of Agreement. The
execution, delivery and performance by Assignor of this Agreement and the
consummation by Assignor of the transactions contemplated hereby have been
duly authorized by all necessary corporate action required to be taken on the
part of the Assignor. This Agreement has been duly and validly executed and
delivered by Assignor and constitutes the valid and binding obligation of
Assignor, enforceable in accordance with its terms. The execution, delivery
and performance by Assignor of this Agreement and the consummation by Assignor
of the transactions contemplated hereby will not, with or without the giving
of notice or the lapse of time, or both, (a) violate any provision of any law,
rule or regulation to which Assignor is subject; (b) violate any order,
judgment or decree applicable to Assignor; or (c)
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conflict with or result in a breach of or a default under any term or
condition of Assignor's Certificate of Incorporation or By-laws or any term or
condition of any agreement or other instrument to which Assignor is a party or
by which it or its assets may be bound, except in each case, for violations,
conflicts, breaches or defaults which in the aggregate would not materially
hinder or impair the consummation of the transactions contemplated hereby.
8.3 Consents. No consent, approval or authorization of, exemption
by, or filing with, any governmental or regulatory authority or any third
party is required in connection with the execution, delivery and performance
by Assignor of this Agreement, except for consents, approvals, authorizations,
exemptions and filings, if any, which have been obtained.
8.4 Compliance with Applicable Laws. Assignor is not engaging in
any activity or omitting to take any action as a result of which Assignor is
in violation of any law, rule, regulation, ordinance, statute, order,
injunction or decree, or any other requirement of any court or governmental or
administrative body or agency, applicable to the Business, and neither the
execution and delivery by Assignor of this Agreement or of any of the other
agreements and instruments to be executed and delivered by it pursuant hereto,
the performance by Assignor of its obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby will result in
any such violation. Assignor is in compliance with all material requirements
imposed in writing by any insurance carrier of Assignor to the extent such
carrier is an insurer or indemnitor of the Business. The Business is not
subject to any notice of violation of law, municipal ordinance, orders or
requirements issued by any building department or other governmental agency or
subdivision having jurisdiction, other than notice of its failure to pay
federal taxes.
8.5 Permits. All Permits required by any federal, state, or local
law, rule or regulation and necessary for the operation of the Business as
currently being conducted have been obtained and are currently in effect. No
registrations, filings, applications, notices, transfers, consents, approvals,
orders, qualifications, waivers or other actions of any kind are required by
virtue of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby (a) to avoid the loss of any Permit or
the violation of any law, regulation,
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order or other requirement of law, or (b) to enable Assignee to continue the
operation of the Business as presently conducted after the Closing.
8.6 The License. Attached hereto as Exhibit A is a true and correct
copy of the License. The License is in full force and effect, has not been
modified or amended in any way and neither the Licensor nor Assignor is in
default, or sent or received any notice of default, in respect of the License.
No event has occurred or circumstance exists which, with the giving of notice
or the passage of time, or both, would constitute a default under the License.
Neither Assignor nor Licensors has exercised any right or option, or stated
its intent, to terminate or cancel the License. Assignor has not assigned,
transferred or conveyed the License or any interest therein, or granted any
right or option with respect thereto, to any party other than Assignee.
8.7 Personal Property. Exhibit B sets forth a complete
list of all Personal Property necessary for the use and operation
of the Business as currently conducted.
8.8 Title to the License and Property. The License and the Property
are free and clear of any and all liens, charges, encumbrances, mortgages,
pledges, security interests, easements, agreements and other interests and
adverse claims (collectively, "Encumbrances").
8.9 Contracts. Except for the License and the Contracts listed on
Exhibit C hereto, Assignor is not a party to any leases, contracts, orders or
agreements relating to the Business or the Property (written or otherwise).
8.10 Litigation. There is no action or proceeding or governmental
investigation pending, or, to the best of Assignor's knowledge, threatened
against, or relating to, Assignor (insofar as it relates to the License or the
Business), the transactions contemplated by this Agreement, nor is there any
basis for any such action, proceeding or investigation.
8.11 Employee Agreements. There are no union or employment
contracts or agreements (written or oral) involving employees of Assignor or
its affiliates affecting the License or the Business which will survive the
Closing. All employees of Assignor will have been terminated as of the Closing
Date.
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8.12 Financial Condition. Assignor has delivered to Assignee true
and correct copies of audited financial statements consisting of balance
sheets and income statements of Assignor as of December 31, 1995 and for the
quarters ended March 31, 1996 and June 30, 1996. Such balance sheet presents
fairly the financial condition, assets and liabilities of Assignor as of its
date; such statement of income presents fairly the results of operations of
Assignor for the period indicated. The financial statements referred to in
this Section are in accordance with the books and records of Assignor. Since
December 31, 1995 and since June 30, 1996: (a) there has at no time been a
material adverse change in the financial condition, results of operations,
businesses, properties, assets, liabilities or future prospects of Assignor,
the License, the Property or Business; (b) the Business has been conducted in
all respects only in the ordinary course; and (c) Assignor has not suffered an
extraordinary loss (whether or not covered by insurance) or waived any right
of substantial value.
8.13 Full Disclosure. To the best knowledge of Assignor, none of
the information supplied by Assignor herein or in the exhibits hereto contains
any untrue statement of a material fact or omits to state a material fact
required to be stated herein or necessary in order to make the statements
herein, in light of the circumstances under which they are made, not
misleading.
9. Representations and Warranties of Assignee. Assignee
hereby represents and warrants to Assignor as follows:
9.1 Organization; Power and Authority. Assignee is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite power and authority to carry on its
business as it is now being conducted, to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
9.2 Due Authorization and Execution; Effect of Agreement. The
execution, delivery and performance by Assignee of this Agreement and the
consummation by Assignee of the transactions contemplated hereby have been
duly authorized by all necessary corporate action required to be taken on the
part of Assignee. This Agreement has been duly and validly executed and
delivered by Assignee and constitutes the valid and binding
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obligation of Assignee, enforceable in accordance with its terms. The
execution, delivery and performance by Assignee of this Agreement and the
consummation by Assignee of the transactions contemplated hereby will not,
with or without the giving of notice or the lapse of time, or both, (a)
violate any provision of any law, rule or regulation to which Assignee is
subject; (b) violate any order, judgment or decree applicable to Assignee; or
(c) conflict with or result in a breach of or a default under any term or
condition of Assignee's Certificate of Incorporation or By-Laws or any
agreement or other instrument to which Assignee is a party or by which it or
its assets may be bound, except in each case, for violations, conflicts,
breaches or defaults which in the aggregate would not materially hinder or
impair the consummation of the transactions contemplated hereby.
10. Survival. The representations and warranties of the
parties made in Articles 8 and 9 shall survive the Closing.
11. Further Assurances. At any time and from time to time
after the date hereof, either party shall, at the request of the
other party, execute and deliver any further instruments or documents
and take all such further action as the requesting party may
reasonably request in order to transfer into the name of Assignee the License
and any and all Property contemplated to be sold pursuant to this Agreement
and to further consummate the transactions contemplated by this Agreement.
This Article shall survive the Closing.
12. Brokers. Assignor and Assignee warrant and represent to each other
that they dealt with no broker, finder or similar agent or party who or which
might be entitled to a commission or compensation on account of introducing
the parties, the negotiation or execution of this Agreement and/or the closing
of the transaction provided for herein, other than _______________ (the
"Broker"). Assignee and Assignor hereby respectively agree to indemnify and
hold harmless the other party from and against all loss, liability, damage and
expense (including, without limitation, attorneys' fees) imposed upon or
incurred by the other party by reason of any claim for commissions or other
compensation for bringing about this transaction by any broker, finder or
similar agent or party other than the Broker who claims to have dealt with the
indemnifying party in connection with this transaction. Assignor agrees to pay
the Broker any commissions due the Broker in connection with this transaction
pursuant to a
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separate agreement between Assignor and the Broker. The provisions of this
Article shall survive the Closing or any termination of this Agreement.
13. Indemnification.
13.1 Subject to the further provisions of this Article, Assignor
shall protect, defend, hold harmless and indemnify Assignee, its officers,
directors, shareholders, employees, agents and affiliates, and their
respective successors and assigns, from, against and in respect of any and all
losses, liabilities, deficiencies, penalties, fines, costs, damages and
expenses whatsoever (including without limitation, reasonable professional
fees and costs of investigation, litigation, settlement, and judgment and
interest) ("Losses") that may be suffered or incurred by any of them arising
from or by reason of (i) any Retained Liability or other liability or
obligation of Assignor which is not an Assumed Liability; (ii) the breach of
any representation, warranty, covenant or agreement of Assignor contained in
this Agreement or in any document or other writing delivered pursuant to this
Agreement; and (iii) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses (including without limitation,
interest, penalties, reasonable legal fees and accounting fees) incident to
the foregoing and the enforcement of the provisions of this Section 13.1.
13.2 Subject to the further provisions of this Article, Assignee
shall protect, defend, hold harmless and indemnify Assignor, its partners,
employees and agents, and its successors and assigns from, against and in
respect of any and all Losses that may be suffered or incurred by any of them
arising from or by reason of (i) any of the Assumed Liabilities on and after
the date hereof, (ii) the breach of any representation, warranty, covenant or
agreement of Assignee contained in this Agreement or in any document or other
writing delivered pursuant to this Agreement; and (iii) any and all actions,
suits, proceedings, claims, demands, assessments, judgments, costs and
expenses (including without limitation, interest, penalties, reasonable legal
fees and accounting fees) incident to the foregoing and the enforcement of the
provisions of this Section 13.2.
13.3 Whenever a party hereto (such party and each of its affiliates
which is entitled to indemnification pursuant to any
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provision of this Agreement, an "Indemnified Party") shall learn after the
Closing of a claim that, if allowed (whether voluntarily or by judicial or
quasi-judicial tribunal or agency), would give rise to an obligation of
another party (the "Indemnifying Party") to indemnify the Indemnified Party
under any provision of this Agreement, before paying the same or agreeing
thereto, the Indemnified Party shall promptly notify the Indemnifying Party in
writing of all such facts within the Indemnified Party's knowledge with
respect to such claim and the amount thereof (a "Notice of Claim"). If, prior
to the expiration of fifteen (15) days from the mailing of a Notice of Claim,
the Indemnifying Party shall request, in writing, that such claim not be paid,
the Indemnified Party shall not pay the same, provided the Indemnifying Party
proceeds promptly, at its or their own expense (including employment of
counsel reasonably satisfactory to the Indemnified Party), to settle,
compromise or litigate, in good faith, such claim. After notice from the
Indemnifying Party requesting the Indemnified Party not to pay such claim and
the Indemnifying Party's assumption of the defense of such claim at its or
their expense, the Indemnifying Party shall not be liable to the Indemnified
Party for any legal or other expense subsequently incurred by the Indemnified
Party in connection with the defense thereof. However, the Indemnified Party
shall have the right to participate at its expense and with counsel of its
choice in such settlement, compromise or litigation. The Indemnified Party
shall not be required to refrain from paying any claim which has matured by a
court judgment or decree, unless an appeal is duly taken therefrom and
execution thereof has been stayed, nor shall the Indemnified Party be required
to refrain from paying any claim where the delay in paying such claim would
result in the foreclosure of a lien upon any of the property or assets then
held by the Indemnified Party. The failure to provide a timely Notice of Claim
as provided in this Section 13.3 shall not excuse the Indemnifying Party from
its or their continuing obligations hereunder; however, the Indemnified
Party's claim shall be reduced by any damages to the Indemnifying Party
resulting from the Indemnified Party's delay or failure to provide a Notice of
Claim as provided in this Section 13.3.
13.4 For purposes of this Article, any assertion of fact and/or law
by a third party that, if true, would constitute a breach of a representation
or warranty made by a party to this Agreement or make operational an
indemnification obligation hereunder, shall, on the date that such assertion
is made,
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immediately invoke the Indemnifying Party's obligation to protect, defend,
hold harmless and indemnify the Indemnified Party pursuant to this Article.
13.5 The obligation of the Assignor under Section 13.1 hereof
shall be satisfied first from the Escrowed Funds (as defined in the Escrow
Agreement, dated as of the date hereof, among Assignor, Assignee and
Continental Stock Transfer & Trust Company), and, if the Escrowed is
inadequate to provide indemnification to Assignee, then from Assignor
directly.
14. Post=Closing Covenants. Promptly upon the execution of this
Agreement, the Assignor shall: (1) change its name such that it shall no
longer use the words "Colbert" or "Xxxxxxx", (2) withdraw its qualification to
do business in all states in which it is now so qualified, and (3) cease from
using the names "Colbert" and "Xxxxxxx" or any combination thereof.
15. Notices. All notices, demands, requests, consents or other
communications ("Notices") which either party may desire or be required to
give to the other hereunder shall be in writing and shall be delivered by
hand, overnight express carrier, or sent by registered or certified mail,
return receipt requested, postage prepaid, in either event, addressed to the
parties at their respective addresses first above set forth. A copy of any
Notice given by Assignor to Assignee shall simultaneously be given in either
manner provided above to Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxx, Esq.
Notices given in the manner aforesaid shall be deemed to have been given three
(3) business days after the day so mailed, the day after delivery to any
overnight express carrier and on the day so delivered by hand. Either party
shall have the right to change its address(es) for the receipt of Notices by
giving Notice to the other party in either manner aforesaid. Any Notice
required or permitted to be given by either party may be given by that party's
attorney.
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16. Miscellaneous.
16.1 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
16.2 This Agreement shall be governed by, interpreted under and
construed and enforced in accordance with, the laws of the State of New York.
16.3 The captions or article headings in this Agreement are for
convenience only and do not constitute part of this Agreement.
16.4 This Agreement has been fully negotiated by the parties and
rules of construction construing ambiguities against the party responsible for
drafting agreements shall not apply.
16.5 It is agreed that, except where otherwise expressly provided
in particular Articles or Sections of this Agreement, none of the provisions
of this Agreement shall survive the Closing.
16.6 This Agreement (including the Exhibits annexed hereto)
contains the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior understandings, if any, with respect
thereto.
16.7 This Agreement may not be modified, changed, supplemented or
terminated, nor may any obligations hereunder be waived, except by written
instrument signed by the party to be charged or by its agent duly authorized
in writing or as otherwise expressly permitted herein.
16.8 No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof or of any other agreement or provision herein contained. No extension
of the time for performance of any obligations or acts shall be deemed an
extension of the time for performance of any other obligations or acts.
16.9 This Agreement may be executed in one or more counterparts,
each of which when so executed and delivered shall
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be deemed an original, but all of which taken together shall constitute but
one and the same original.
16.10 Either party may cause this Agreement to be recorded in the
appropriate public office.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
COLBERT BALLARD GOLF
LEARNING CENTERS, INC.
By:_______________________
Name:
Title:
C.B. FAMILY GOLF CENTERS,
INC.
By: ______________________
Name:
Title:
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