Case 16-10527-MFW Doc 1972 Filed 05/19/16 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SPORTS AUTHORITY HOLDINGS, INC., et al., 1 Debtors. Chapter 11 Case No. 16-10527 (MFW) (Jointly Administered) Ref. Docket Nos. 106, 1186, 1691 & 1752 NOTICE OF FILING OF ASSIGNMENT AGREEMENT AND PROPOSED ORDER IN CONNECTION WITH DISPOSITION OF THE DEBTORS LEASE RELATED TO STORE NUMBER 231 PLEASE TAKE NOTICE that, on March 2, 2016, Sports Authority Holdings, Inc. and its affiliated debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the Debtors ) filed the Debtors' Motion, Pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, Fed. R. Bankr. P. 2002, 6003, 6004, 6006, 9007, 9008 and 9014 and Del. Bankr. L.R. 2002-1, 6004-1 and 9006-1, for Entry of (A) an Order (I) Approving Bid Procedures in Connection with the Sale of Substantially All of the Debtors' Assets, (II) Scheduling an Auction for and Hearing to Approve Sale of Assets, (III) Approving Notice of Respective Date, Time and Place for Auction and for Hearing on Approval of Sale, (IV) Approving Procedures for the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, (V) Approving Form and Manner of Notice Thereof, and (VI) Granting Related Relief; and (B) an Order Authorizing and Approving (I) the Sale of Substantially All of the Debtors' Assets Free and Clear of Liens, Claims, Rights, Encumbrances, and Other Interests, (II) the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, and (III) Related Relief [Docket No. 106] (the Motion ) with the United States Bankruptcy Court for the District of Delaware (the Court ). PLEASE TAKE FURTHER NOTICE that, on April 14, 2016, the Court entered that certain Order (A) Approving Bid Procedures in Connection with (I) the Sale of Substantially All of the Debtors Assets and (II) the Transfer, Assumption and Assignment of Certain Unexpired Leases of Nonresidential Real Property, (B) Scheduling Separate Auctions for and Hearings to Approve the Sale of Assets and Unexpired Leases of Nonresidential Real Property Subject to the Debtors Store Closing Plan, (C) Approving Notice of Respective Date, Time and Place for Auctions and for Hearings on Approval of Respective Sales, (D) Approving Procedures for the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection with the Sales, (E) Approving Form and Manner of Notice Thereof, and 1 The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: Sports Authority Holdings, Inc. (9008); Slap Shot Holdings, Corp. (8209); The Sports Authority, Inc. (2802); TSA Stores, Inc. (1120); TSA Gift Card, Inc. (1918); TSA Ponce, Inc. (4817); and TSA Caribe, Inc. (5664). The headquarters for the above-captioned Debtors is located at 1050 West Hampden Avenue, Englewood, Colorado 80110. 01:18677111.1
Case 16-10527-MFW Doc 1972 Filed 05/19/16 Page 2 of 3 01:18677111.1 (F) Granting Related Relief [Docket No. 1186] (the Bidding Procedures Order ). 2 PLEASE TAKE FURTHER NOTICE that the Bidding Procedures Order established, among other things, a deadline to submit binding Bids for the Debtors Closing Store Leases as April 28, 2016 at 5:00 p.m. (ET) (the Bid Deadline ), and further provided that if two or more Qualified Bids were received by the Bid Deadline for a Closing Store Lease or lot of Closing Store Leases, the Debtors would have the discretion to hold an Auction for such Closing Store Leases. PLEASE TAKE FURTHER NOTICE that, on May 3, 2016, the Debtors filed that certain Notice of Bidding Results, Adjourned Closing Store Lease Auction, and Status of Closing Store Leases [Docket No. 1691] (the Auction Notice ). Attached thereto as Exhibit C was a list of Closing Store Leases (such designated Closing Store Leases, the Accepted Bid Closing Store Leases ) for which the Debtors received only one Qualified Bid and, in consultation with the Consultation Parties, determined to accept the sole Qualified Bid for each Accepted Bid Closing Store Lease without conducting an Auction. As set forth in the Auction Notice, the Debtors acceptance of the Bid for the respective Accepted Bid Closing Store Leases remained subject to further documentation acceptable to the Debtors and a full reservation of rights, in all respects. PLEASE TAKE FURTHER NOTICE that, on May 6, 2016, the Debtors filed that certain Notice of Proposed (I) Sale Orders, (II) Form Asset Purchase Agreement, and (III) Form of Assumption and Assignment Agreement [Docket No. 1752] (the Proposed Forms Notice ). Attached to the Proposed Forms Notice as Exhibit C was a form assumption and assignment agreement (the Form Agreement ), and attached to the Proposed Forms Notice as Exhibit D was a proposed form of Closing Store Lease Sale order (the Form Closing Store Lease Sale Order ), both of which the Debtors intended to utilize in connection with consummating transactions relating to the transfer and assignment of Closing Store Leases. PLEASE TAKE FURTHER NOTICE that, pursuant to the Bidding Procedures Order, a hearing to consider approval of the proposed disposition of the Accepted Bid Closing Store Leases, among others, is currently scheduled for May 25, 2016 at 9:30 a.m. (ET) before the Honorable Mary F. Walrath, United States Bankruptcy Judge, United States Bankruptcy Court for the District of Delaware, 5th Floor, Courtroom No. 4, Wilmington, Delaware 19801 (the Closing Store Lease Sale Hearing ). PLEASE TAKE FURTHER NOTICE that, in connection with the Closing Store Lease Sale Hearing, the Debtors hereby submit an assumption and assignment agreement (the PGA Agreement ) memorializing the agreement reached by and between the Debtors and GOLF & TENNIS PROP SHOP, INC. d/b/a PGA TOUR Superstore. (the Assignee ), a copy of which is attached hereto as Exhibit A, whereby the Debtors have agreed, subject to Court approval and other conditions precedent set forth therein, to assume, assign and transfer their leasehold interest in Store No. 231, located in Shenandoah, Montgomery County, Texas, to the Assignee on the terms set forth therein. A blackline comparing the PGA Agreement against the 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Bidding Procedures Order. 2
Case 16-10527-MFW Doc 1972 Filed 05/19/16 Page 3 of 3 Form Agreement is attached hereto as Exhibit B. PLEASE TAKE FURTHER NOTICE that the Debtors intend to present a form of order, in substantially the form attached hereto as Exhibit C (the Proposed PGA Order ), approving the PGA Agreement at the Closing Store Lease Sale Hearing, consistent with the terms outlined below. A blackline comparing the Proposed PGA Order against the Form Closing Store Lease Sale Order is attached hereto as Exhibit D. PLEASE TAKE FURTHER NOTICE that the PGA Agreement and Proposed PGA Order remain subject to further review, comment and revision from all interested parties. Dated: May 19, 2016 Wilmington, Delaware /s/ Andrew L. Magaziner Michael R. Nestor (No. 3526) Kenneth J. Enos (No. 4544) Andrew L. Magaziner (No. 5426) YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 mnestor@ycst.com kenos@ycst.com amagaziner@ycst.com -and- Robert A. Klyman (CA No. 142723) Matthew J. Williams (NY No. 3019106) Jeremy L. Graves (CO No. 45522) Sabina Jacobs (CA No. 274829) GIBSON, DUNN & CRUTCHER LLP 333 South Grand Avenue Los Angeles, CA 90071-1512 Telephone: (213) 229-7000 Facsimile: (213) 229-7520 rklyman@gibsondunn.com mjwilliams@gibsondunn.com jgraves@gibsondunn.com sjacobs@gibsondunn.com Counsel to the Debtors and Debtors in Possession 01:18677111.1 3
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 1 of 8 Exhibit A PGA Agreement 01:18677111.1
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 2 of 8 ASSIGNOR MAY HAVE CLAIMS UNDER THE LEASE FOR CHARGES PAID BY THE ASSIGNOR, WHICH CLAIMS MAY BE DISPUTED. THESE CLAIMS WILL BE RETAINED BY ASSIGNOR. AGREEMENT OF ASSUMPTION AND ASSIGNMENT OF LEASE THIS ASSUMPTION AND ASSIGNMENT AGREEMENT (this Agreement ) is made as of this day of, 2016, by and between TSA STORES, INC., a Delaware corporation ( Assignor ), and GOLF & TENNIS PRO SHOP, INC. d/b/a PGA TOUR Superstore ( Assignee ). I. The Lease Assignor, a debtor in possession, is a tenant under a lease dated as of November 2, 1999 (the Lease ) for the premises located at Portofino Shopping Center, Shenandoah, Montgomery County, Texas and more specifically described in the Lease (the Premises ). A copy of the Lease is attached hereto as Exhibit A. The landlord under the Lease is KRG Portofino, LLC, successor in interest to Portofino, LTD. ( Landlord ). II. Assignor s Bankruptcy Case On March 2, 2016, Assignor filed a voluntary petition for relief under Chapter 11 of the Title 11 of the United States Code, 11 U.S.C. 101-1330 (the Bankruptcy Code ) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ). Assignor continues to operate its business and manage its properties as a debtor-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. No trustee has been appointed in Assignor s Chapter 11 case. III. Assignor s Assignment of the Lease Assignee is desirous of having Assignor assign to it, pursuant to sections 363 and 365 of the Bankruptcy Code, on the terms and conditions set forth herein, all of Assignor s right, title and interest of any kind or nature in and to the Lease including, without limitation, the right to possession. NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS: Pursuant to the terms and for the consideration set forth below, Assignor hereby agrees to sell, transfer, convey, and assign to Assignee, its successors and assigns, all of Assignor s right, title, and interest in and to the Lease for the remainder of the Lease term (the Assignment ) and Assignee hereby accepts the Assignment; provided, however, that any security deposit presently on account with Landlord will either be refunded by Assignee to Assignor, or utilized by Assignor to reduce arrearages, if any, 01:18718382.1 1
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 3 of 8 under the Lease and replaced to Landlord by Assignee. Assignee hereby recognizes and acknowledges that Landlord s right to full performance of all terms, conditions and covenants of the Lease remains in full force and effect on and after the effective date of the Assignment, except to the extent that any such terms, conditions, and covenants violate or are unenforceable pursuant to the Bankruptcy Code. Except to the extent otherwise agreed in writing by Landlord, Assignee assumes all of the terms, conditions and covenants of the Lease as tenant under the Lease, and agreed to assume and undertake to pay, perform and discharge all of Assignor s obligations and duties with respect to the Lease. Further, pursuant to section 365(f) of the Bankruptcy Code, on and after the effective date of the Assignment, Assignor and its estate shall be relieved from any liability for any breach of the Lease occurring after the effective date of the Assignment, and Assignee agrees to indemnify and hold Assignor harmless from any default in the performance of such terms, conditions and covenants occurring after the effective date of the Assignment. The Assignor has notified or will notify the Landlord of the monetary value of any defaults existing under the Lease (the Cure Costs ), which amount may be contested by the Landlord. Any dispute as to the amount of Cure Costs will either be resolved consensually by the Assignor and the Landlord or determined by the Bankruptcy Court. Pursuant to paragraph (A) hereof, payment of the Cure Costs by the Assignee constitutes a portion of the Purchase Price (as defined below). Payment of the Cure Costs by the Assignee shall constitute full satisfaction of Landlord s claim for monies owed under the Lease by Assignor, and payment of such amount by Assignee to Landlord together with the assumption and assignment of the Lease to Assignee pursuant to this Agreement shall relieve Assignor of all liability arising under the Lease on account of any and all claims or defaults accruing prior to the effective date of the Assignment. Assignee is responsible for all Cure Costs, as determined by the Bankruptcy Court or agreed upon between the Assignee and the Landlord. A. Consideration -- The total consideration to be paid by Assignee is (i) to Assignor $2,050,000.00, and (ii) to Landlord, the amount of Cure Costs, each payable at the Closing (as defined herein) (the Purchase Price ) in immediately available funds wired to the account specified by the Assignor and the Landlord, respectively. Upon execution of this Agreement, Assignee shall pay to Assignor a deposit equal to $20,000. At the Closing, Assignee shall pay the balance of the Purchase Price to Assignor and the Landlord, as applicable. Said deposit and balance shall be paid by certified or bank check made payable to Assignor, or by wire transfer to the account of Assignor, pursuant to written wire instructions to be provided by Assignor. Said funds are to be released and paid as directed by an order of the Bankruptcy Court approving the Assignment of the Lease to Assignee on the terms and conditions set forth herein. B. Closing and Effective Date of Assignment -- The closing of the Assignment and the delivery of possession of the Premises to Assignee (collectively, the Closing ) shall take place within one (1) business day upon the later to occur of (i) the approval by the Bankruptcy Court and the entry of the order approving the assumption and assignment and sale of the Lease to Assignee and (ii) the date that any liquidators finish selling Assignor s personal property at the Premises so long as such date does not occur after June 30, 2016 absent further order of the Bankruptcy Court; provided, that, the Assignee shall reimburse the Assignor for rent paid by the Assignor related to any 01:18718382.1 2
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 4 of 8 portion of any rental period following the Closing. The effective date of the Assignment shall be the date of the Closing. C. Bankruptcy Court Approval/Higher and Better Offers -- This Agreement is contingent upon (a) Assignor obtaining an order of the Bankruptcy Court authorizing: (1) Assignor to enter into the Agreement and (2) the assumption and assignment of the Lease pursuant hereto and (b) Assignor not receiving a higher or otherwise better offer from a third party or the Landlord at an auction for the Lease or otherwise. If the Bankruptcy Court does not approve this Assignment for any reason, other than a material breach of this Agreement by Assignee or as a result of a higher and better offer received by Assignor on or prior to the date of the hearing to approve this Assignment, then all escrowed funds shall be released to Assignee, and Assignee shall have no further claims against Assignor. If Assignee fails to close for any reason other than a material breach of this Agreement by Assignor, then Assignee s deposit shall become non-refundable and shall be forfeited to Assignor as liquidated damages. D. Free and Clear of Liens and Encumbrances -- Upon entry of an order approving the assumption and assignment contemplated by this Agreement, the Lease shall be free and clear of any liens, security interests, pledges or other interests, all such interests to attach to the proceeds paid to Assignor by Assignee (other than (i) real estate taxes not yet due and payable or which are being contested in good faith and (ii) easements, rights-of-way, restrictive covenants, zoning laws, municipal ordinances, and any other minor encumbrances on title that appear on the current title report, a copy of which is attached hereto as Exhibit B). E. As Is Where Is Transaction Assignee hereby acknowledges and agrees that Assignor makes no representations or warranties whatsoever, express or implied, with respect to any matter relating to the Lease. Without in any way limiting the foregoing, Assignor hereby disclaims any warranty (express or implied) of merchantability or fitness for any particular purpose as to any portion of the Lease or related assets. Assignee further acknowledges that the Assignee has conducted an independent inspection and investigation of the physical condition of the subject premises as Assignee deemed necessary or appropriate and that in proceeding with its acquisition of the Lease, Assignee is doing so based upon such independent inspections and investigations. Accordingly, Assignee will accept the Lease AS IS and WHERE IS. F. Adequate Assurance Data -- As a condition of the bidding procedures approved by the Bankruptcy Court (the Bidding Procedures ) and in compliance with said Bidding Procedures, prior to or with the execution of this Agreement, Assignee has supplied Assignor with: (i) the full name and identity of the proposed Assignee of the Lease; (ii) a current financial statement or such other proof of financial condition of the proposed Assignee or guarantor, if any; (iii) a written statement of the proposed Assignee s expected use of the Premises; (iv) such other information relating to the proposed business to be conducted at the Premises and retail experience of the proposed Assignee; (v) a projection of gross sales, if the Lease contains a percentage 01:18718382.1 3
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 5 of 8 01:18718382.1 rent provision; and (vi) any additional information required to be provided by the Bidding Procedures. Assignee agrees to work cooperatively with the Landlord to provide any additional information that the Landlord or the Assignor requests in furtherance of obtaining Bankruptcy Court approval for this Agreement. G. Use -- Assignee shall use the Premises for such purposes as are authorized under the Lease or applicable law. H. Possession -- Assignor agrees to provide Assignee with possession of the Premises on the Closing, subject only to an extension ordered by the Bankruptcy Court. I. Initial Rent -- Upon the Closing, Assignee shall be responsible for, and shall pay, rent and other obligations and charges due under the Lease to Landlord in accordance with the terms of the Lease from and after the Closing. For the avoidance of doubt, Assignee shall be responsible for rent arising under the Lease beginning on July 1, 2016. J. Reimbursement by Assignee As required by paragraph B, Assignee shall reimburse Assignor for any rent or related charges due under the Lease for any period subsequent to Closing that are paid by Assignor to Landlord. Any such amounts shall be reimbursed by Assignee to Assignor at the Closing. K. Commission -- With the exception of consulting fees payable by Assignor to A&G Asset Management, LLC, any commission due and payable as a result of this Agreement shall be paid by Assignee. Assignee hereby indemnifies Assignor and its estate for any claims of brokerage other than that made by A&G Realty Partners LLC. L. Further Assurances. At the Closing, Assignor shall, upon Assignee s request, execute and deliver to Assignee such other instruments of transfer as shall be reasonably necessary to evidence the assignment by Assignor and assumption by Assignee of the Lease, and Assignor, on the one hand, and Assignee, on the other hand, shall use its commercially reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary under applicable Law, and execute and deliver such instruments and documents and to take such other actions, as may be required to consummate the transactions contemplated by this Agreement at or after the Closing; provided that nothing in this paragraph L shall prohibit Assignor from ceasing operations or winding up its affairs following the Closing. In furtherance and not in limitation of the foregoing, in the event that any rights under the Lease shall not have been conveyed at Closing, Assignor shall use commercially reasonable efforts to convey such rights to Assignee as promptly as practicable after the Closing. M. Miscellaneous (1) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and to the extent permissible and not inconsistent with the laws of the State of Delaware, under the laws of the state where the Premises is located. The parties agree that the Bankruptcy Court shall have exclusive jurisdiction 4
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 6 of 8 over any disputes hereunder, and they each hereby consent to such jurisdiction. (2) This Agreement sets forth the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and supersedes any prior instruments, arrangements and understandings relating to the subject matter hereof, except the Lease and all amendments thereto. (3) Assignor may assign its rights and obligations hereunder to any trustee appointed by the Bankruptcy Court. Assignee may not assign its rights and obligations hereunder to any party without Assignor s consent and, following Bankruptcy Court approval, any assignment of this Agreement by Assignee must also be permitted by the terms of the Lease or agreed to by Landlord. (4) This Agreement may be executed with counterpart signature pages or in more than one counterpart, all of which shall be deemed one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to all the parties. (5) If any term, covenant or condition of this Agreement or its application to any person or circumstances shall be invalid or unenforceable, the remainder of those to which it is held invalid or unenforceable shall not be affected, and each term shall be valid and enforceable to the fullest extent permitted by law. (6) Any notice, demand, request or other communication that any party hereto may be required or may desire to give hereunder ( Notice or Notices ) shall be in writing and shall be given as follows: (a) by hand delivery; (b) by overnight mail via Federal Express or other reputable express courier service; or (c) by facsimile transmission (other than for notices of default): If to Assignor: TSA STORES, INC. 1050 West Hampden Avenue Englewood, Colorado 80110 Attention: Lon B. Novatt With a copy to: Gibson, Dunn & Crutcher LLP 333 South Grand Avenue Los Angeles, CA 90071-1512 Attention: Robert A. Klyman 01:18718382.1 5
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 7 of 8 If to Assignee: Golf & Tennis Pro Shop, Inc. 1801 Old Alabama Road Roswell, Georgia 30076 Attention: Matthew Prater With a copy to: Golf & Tennis Pro Shop, Inc. 1801 Old Alabama Road Roswell, Georgia 30076 Attention: President Hartman Simons & Wood LLP 6400 Powers Ferry Road, NW, Suite 400 Atlanta, Georgia 30339 Attention: Diane Lidz, Esq. or at such other address or to such other addressee or to such other facsimile number as the party to be served with Notice shall have furnished in writing to the party seeking or desiring to serve Notice as a place for the service of Notice. Notices shall be deemed to have been received (a) on the next business day if given by overnight mail, or (b) on the same day, if given by facsimile transmission, upon receipt of successful transmission. [Signatures appear on the following page.] 01:18718382.1 3073329-5 11317.0053000 Exhibit B, Page 6
Case 16-10527-MFW Doc 1972-1 Filed 05/19/16 Page 8 of 8 IN WITNESS WHEREOF, this Assignment has been duly executed this day of, 2016. ASSIGNOR: TSA STORES, INC., Debtor-in-Possession By: Name: Title: ASSIGNEE: GOLF & TENNIS PRO SHOP, INC. d/b/a PGA TOUR SUPERSTORE By: Name: 01:18718382.1 3073329-5 11317.0053000 Exhibit B, Page 7
Exhibit B Blackline PGA Agreement 01:18677111.1
ASSIGNOR MAY HAVE CLAIMS UNDER THE LEASE FOR CHARGES PAID BY THE ASSIGNOR, WHICH CLAIMS MAY BE DISPUTED. THESE CLAIMS WILL BE RETAINED BY ASSIGNOR. AGREEMENT OF ASSUMPTION AND ASSIGNMENT OF LEASE THIS ASSUMPTION AND ASSIGNMENT AGREEMENT (this Agreement ) is made as of this day of, 2016, by and between TSA STORES, INC., a Delaware corporation ( Assignor ), and GOLF & TENNIS PRO SHOP, INC. d/b/a PGA TOUR Superstore ( Assignee ). I. The Lease Assignor, a debtor in possession, is a tenant under a lease dated as of November 2, 1999 (the Lease ) for the premises located at Portofino Shopping Center, Shenandoah, Montgomery County, Texas and more specifically described in the Lease (the Premises ). A copy of the Lease is attached hereto as Exhibit A. The landlord under the Lease is KRG Portofino, LLC, successor in interest to Portofino, LTD. ( Landlord ). II. Assignor s Bankruptcy Case On March 2, 2016, Assignor filed a voluntary petition for relief under Chapter 11 of the Title 11 of the United States Code, 11 U.S.C. 101-1330 (the Bankruptcy Code ) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ). Assignor continues to operate its business and manage its properties as a debtor-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. No trustee has been appointed in Assignor s Chapter 11 case. III. Assignor s Assignment of the Lease 01:18663062.118 718382.1 Assignee is desirous of having Assignor assign to it, pursuant to sections 363 and 365 of the Bankruptcy Code, on the terms and conditions set forth herein, all of Assignor s right, title and interest of any kind or nature in and to the Lease including, without limitation, the right to possession. NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS: Pursuant to the terms and for the consideration set forth below, Assignor hereby agrees to sell, transfer, convey, and assign to Assignee, its successors and assigns, all of Assignor s right, title, and interest in and to the Lease for the remainder of the Lease term (the Assignment ) and Assignee hereby accepts the Assignment; provided, however, that any security deposit presently on account with Landlord will either be refunded by Assignee to Assignor, or utilized by Assignor to reduce arrearages, if any, 1
under the Lease and replaced to Landlord by Assignee. Assignee hereby recognizes and acknowledges that Landlord s right to full performance of all terms, conditions and covenants of the Lease remains in full force and effect on and after the effective date of the Assignment, except to the extent that any such terms, conditions, and covenants violate or are unenforceable pursuant to the Bankruptcy Code. Except to the extent otherwise agreed in writing by Landlord, Assignee assumes all of the terms, conditions and covenants of the Lease as tenant under the Lease, and agreed to assume and undertake to pay, perform and discharge all of Assignor s obligations and duties with respect to the Lease. Further, pursuant to section 365(f) of the Bankruptcy Code, on and after the effective date of the Assignment, Assignor and its estate shall be relieved from any liability for any breach of the Lease occurring after the effective date of the Assignment, and Assignee agrees to indemnify and hold Assignor harmless from any default in the performance of such terms, conditions and covenants occurring after the effective date of the Assignment. The Assignor has notified or will notify the Landlord of the monetary value of any defaults existing under the Lease (the Cure Costs ), which amount may be contested by the Landlord. Any dispute as to the amount of Cure Costs will either be resolved consensually by the Assignor and the Landlord or determined by the Bankruptcy Court. Pursuant to paragraph (A) hereof, payment of the Cure Costs by the Assignee constitutes a portion of the Purchase Price (as defined below). Payment of the Cure Costs by the Assignee shall constitute full satisfaction of Landlord s claim for monies owed under the Lease by Assignor, and payment of such amount by Assignee to Landlord together with the assumption and assignment of the Lease to Assignee pursuant to this Agreement shall relieve Assignor of all liability arising under the Lease on account of any and all claims or defaults accruing prior to the effective date of the Assignment. Assignee is responsible for all Cure Costs, as determined by the Bankruptcy Court or agreed upon between the Assignee and the Landlord. A. Consideration -- The total consideration to be paid by Assignee is (i) to Assignor $,2,050,000.00, and (ii) to Landlord, the amount of Cure Costs, each payable at the Closing (as defined herein) (the Purchase Price ) in immediately available funds wired to the account specified by the Assignor and the Landlord, respectively. Upon execution of this Agreement, Assignee shall pay to Assignor a deposit equal to $20,000. At the Closing, Assignee shall pay the balance of the Purchase Price to Assignor and the Landlord, as applicable. Said deposit and balance shall be paid by certified or bank check made payable to Assignor, or by wire transfer to the account of Assignor, pursuant to written wire instructions to be provided by Assignor. Said funds are to be released and paid as directed by an order of the Bankruptcy Court approving the Assignment of the Lease to Assignee on the terms and conditions set forth herein. B. Closing and Effective Date of Assignment -- The closing of the Assignment (and the delivery of possession of the Premises to Assignee (collectively, the Closing ) shall take place within one (1) business day upon the later to occur of (i) the approval by the Bankruptcy Court and the entry of the order approving the assumption and assignment and sale of the Lease to Assignee, provided there is no stay pending appeal, and (ii) the date that any liquidators finish selling Assignor s personal property at the Premises, so long as such date does not occur after [ ], 2016 or such later date 01:18663062.118 718382.1 2
that Assignee may agree to in writing, which may not be unreasonably withheld, conditioned, or delayed. June 30, 2016 absent further order of the Bankruptcy Court; provided, that, the Assignee shall reimburse the Assignor for rent paid by the Assignor related to any portion of any rental period following the Closing. The effective date of the Assignment shall be the date of the Closing. C. Bankruptcy Court Approval/Higher and Better Offers -- This Agreement is contingent upon (a) Assignor obtaining an order of the Bankruptcy Court authorizing: (1) Assignor to enter into the Agreement and, (2) the assumption and assignment of the Lease pursuant hereto, and (b) Assignor not receiving a higher or otherwise better offer from a third party or the Landlord at an auction for the Lease or otherwise. If the Bankruptcy Court does not approve this Assignment for any reason, other than a material breach of this Agreement by Assignee or as a result of a higher and better offer received by Assignor on or prior to the date of the hearing to approve this Assignment, then all escrowed funds shall be released to Assignee, and Assignee shall have no further claims against Assignor. If Assignee fails to close for any reason other than a material breach of this Agreement by Assignor, then Assignee s deposit shall become non-refundable and shall be forfeited to Assignor as liquidated damages. D. Free and Clear of Liens and Encumbrances -- Upon entry of an order approving the assumption and assignment contemplated by this Agreement, the Lease shall be free and clear of any liens, security interests, pledges or other interests, all such interests to attach to the proceeds paid to Assignor by Assignee (other than (i) real estate taxes not yet due and payable or which are being contested in good faith and (ii) easements, rights-of-way, restrictive covenants, zoning laws, municipal ordinances, and any other defects orminor encumbrances on title that would appear on athe current title report or survey, or (ii) any real estate taxes or mechanic s, materialmen s, warehouseman, or other similar liens, each of which are payable by any party other than Assignor or do not relate to Assignor s occupancy of the Premises)., a copy of which is attached hereto as Exhibit B). E. As Is Where Is Transaction Assignee hereby acknowledges and agrees that Assignor makes no representations or warranties whatsoever, express or implied, with respect to any matter relating to the Lease. Without in any way limiting the foregoing, Assignor hereby disclaims any warranty (express or implied) of merchantability or fitness for any particular purpose as to any portion of the Lease or related assets. Assignee further acknowledges that the Assignee has conducted an independent inspection and investigation of the physical condition of the subject premises as Assignee deemed necessary or appropriate and that in proceeding with its acquisition of the Lease, Assignee is doing so based upon such independent inspections and investigations. Accordingly, Assignee will accept the Lease AS IS and WHERE IS. F. Adequate Assurance Data -- As a condition of the bidding procedures approved by the Bankruptcy Court (the Bidding Procedures ) and in compliance with said Bidding Procedures, prior to or with the execution of this 01:18663062.118 718382.1 3
Agreement, Assignee has supplied Assignor with: (i) the full name and identity of the proposed Assignee of the Lease; (ii) a current financial statement or such other proof of financial condition of the proposed Assignee or guarantor, if any; (iii) a written statement of the proposed Assignee s expected use of the Premises,; (iv) such other information relating to the proposed business to be conducted at the Premises and retail experience of the proposed Assignee,; (v) a projection of gross sales, if the Lease contains a percentage rent provision,; and (vi) any additional information required to be provided by the Bidding Procedures. Assignee agrees to work cooperatively with the Landlord to provide any additional information that the Landlord or the Assignor requests in furtherance of obtaining Bankruptcy Court approval for this Agreement. G. Use -- Assignee shall use the Premises for such purposes as are authorized under the Lease or applicable law. More specifically, Assignee s intended use is:. H. Possession -- Assignor agrees to provide Assignee with possession of the Premises on the Closing, subject only to an extension ordered by the Bankruptcy Court. I. Initial Rent -- Upon the Closing, Assignee shall be responsible for, and shall pay, rent and other obligations and charges due under the Lease to Landlord in accordance with the terms of the Lease from and after the Closing. For the avoidance of doubt, Assignee shall be responsible for rent arising under the Lease beginning on MayJuly 1, 2016. J. Reimbursement by Assignee -- As required by paragraph B, Assignee shall reimburse Assignor for any rent or related charges due under the Lease for any period subsequent to the Closing that are paid by Assignor to Landlord. Any such amounts shall be reimbursed by Assignee to Assignor upon either (i) the Closing, to the extent such charges are known, and (ii) to the extent charges are not known at the Closing, 10 days after receipt of notice from Assignor stating in detail charges that Assignor has paid which have not been previously reimbursed by Assigneeat the Closing. K. Commission -- With the exception of consulting fees payable by Assignor to A&G Asset Management, LLC, any commission due and payable as a result of this Agreement shall be paid by Assignee. Assignee hereby indemnifies Assignor and its estate for any claims of brokerage other than that made by A&G Realty Partners LLC. L. Further Assurances. At the Closing, Assignor shall, upon Assignee s request, execute and deliver to Assignee such other instruments of transfer as shall be reasonably necessary to evidence the assignment by Assignor and assumption by Assignee of the LeasesLease, and Assignor, on the one hand, and Assignee, on the other hand, shall use its commercially reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary under applicable Law, and 01:18663062.118 718382.1 4
execute and deliver such instruments and documents and to take such other actions, as may be required to consummate the transactions contemplated by this Agreement at or after the Closing; provided that nothing in this paragraph L shall prohibit Assignor from ceasing operations or winding up its affairs following the Closing. In furtherance and not in limitation of the foregoing, in the event that any rights under the LeasesLease shall not have been conveyed at Closing, Assignor shall use commercially reasonable efforts to convey such rights to Assignee as promptly as practicable after the Closing. M. Miscellaneous (1) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and to the extent permissible and not inconsistent with the laws of the State of Delaware, under the laws of the state where the Premises is located. The parties agree that the Bankruptcy Court shall have exclusive jurisdiction over any disputes hereunder, and they each hereby consent to such jurisdiction. (2) This Agreement sets forth the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and supersedes any prior instruments, arrangements and understandings relating to the subject matter hereof, except the Lease and all amendments thereto. (3) Assignor may assign its rights and obligations hereunder to any trustee appointed by the Bankruptcy Court. Assignee may not assign its rights and obligations hereunder to any party without Assignor s consent and, following Bankruptcy Court approval, any assignment of this Agreement by Assignee must also be permitted by the terms of the Lease or agreed to by Landlord. (4) This Agreement may be executed with counterpart signature pages or in more than one counterpart, all of which shall be deemed one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to all the parties. (5) If any term, covenant or condition of this Agreement or its application to any person or circumstances shall be invalid or unenforceable, the remainder of those to which it is held invalid or unenforceable shall not be affected, and each term shall be valid and enforceable to the fullest extent permitted by law. (6) Any notice, demand, request or other communication that any party hereto may be required or may desire to give hereunder ( Notice or Notices ) shall be in writing and shall be given as follows: (a) by hand delivery; (b) by overnight mail via Federal Express or other reputable express courier service; or (c) by facsimile transmission (other than for notices of default): If to Assignor: 01:18663062.118 718382.1 TSA STORES, INC. 1050 West Hampden Avenue Englewood, Colorado 80110 5
Attention: Lon B. Novatt With a copy to: Gibson, Dunn & Crutcher LLP 333 South Grand Avenue Los Angeles, CA 90071-1512 Attention: Robert A. Klyman 01:18663062.118 718382.1 6
If to Assignee: Golf & Tennis Pro Shop, Inc. 1801 Old Alabama Road Roswell, Georgia 30076 Attention: Matthew Prater With a copy to: Golf & Tennis Pro Shop, Inc. 1801 Old Alabama Road Roswell, Georgia 30076 Attention: President Hartman Simons & Wood LLP 6400 Powers Ferry Road, NW, Suite 400 Atlanta, Georgia 30339 Attention: Diane Lidz, Esq. or at such other address or to such other addressee or to such other facsimile number as the party to be served with Notice shall have furnished in writing to the party seeking or desiring to serve Notice as a place for the service of Notice. Notices shall be deemed to have been received (a) on the next business day if given by overnight mail, or (b) on the same day, if given by facsimile transmission, upon receipt of successful transmission. (7) All sales, transfer and recording taxes, stamp taxes or similar taxes, if any, relating to the assignment of the Lease in connection herewith shall be the sole responsibility of the Assignee and shall be paid to the Assignor at the Closing. [Signatures appear on the following page.] 01:18718382.1 3073329-5 11317.0053000 Exhibit B, Page 7
IN WITNESS WHEREOF, this Assignment has been duly executed this day of, 2016. ASSIGNOR: TSA STORES, INC., Debtor-in-Possession By: Name: Title: ASSIGNEE: GOLF & TENNIS PRO SHOP, INC. d/b/a PGA TOUR SUPERSTORE By: Name: Title: 01:18718382.1 3073329-5 11317.0053000 Exhibit B, Page 8
Case 16-10527-MFW Doc 1972-3 Filed 05/19/16 Page 1 of 18 Exhibit C Proposed PGA Order 01:18677111.1
Case 16-10527-MFW Doc 1972-3 Filed 05/19/16 Page 2 of 18 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SPORTS AUTHORITY HOLDINGS, INC., et al., Debtors. Chapter 11 Case No. 16-10527 (MFW) Jointly Administered Ref. Docket Nos. 106 & 1186 ORDER, PURSUANT TO SECTIONS 105, 363, AND 365 OF THE BANKRUPTCY CODE, (I) AUTHORIZING THE ASSUMPTION, ASSIGNMENT, AND TRANSFER OF THE DEBTORS INTEREST IN A REAL PROPERTY LEASE SUBJECT TO THE CLOSING STORE LEASE BIDDING PROCEDURES; (II) APPROVING THE TERMS OF THE AGREEMENT OF ASSUMPTION AND ASSIGNMENT OF LEASE; AND (III) GRANTING RELATED RELIEF Upon the above-captioned debtors and debtors-in-possessions (the Debtors ) Motion, Pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, Fed. R. Bankr. P. 2002, 6003, 6004, 6006, 9007, 9008 and 9014 and Del. Bankr. L.R. 2002-1, 6004-1 and 9006-1, for Entry of (I) an Order (A) Approving Bid Procedures in Connection with the Sale of Substantially All of the Debtors Assets, (B) Scheduling an Auction for and Hearing to Approve Sale of Assets, (C) Approving Notice of Respective Date, Time and Place for Auction and for Hearing on Approval of Sale, (D) Approving Procedures for the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, (E) Approving Form and Manner of Notice Thereof, and (F) Granting Related Relief; and (II) an Order Authorizing and Approving (A) the Sale of Substantially All of the Debtors Assets Free and Clear of Liens, Claims, Rights, Encumbrances, and Other Interests, (B) the Assumption and Assignment of Certain Executory Contracts and 01:18718383.1 3083318-1 11317.0053000
Case 16-10527-MFW Doc 1972-3 Filed 05/19/16 Page 3 of 18 Unexpired Leases, and (C) Related Relief [D.I. 106] (the Motion ) 1 ; and in connection with this Court s (the Court ) Order (A) Approving Bid Procedures in Connection with the Sale of Substantially All of the Debtors Assets, (B) Scheduling an Auction for and Hearing to Approve Sale of Assets, (C) Approving Notice of Respective Date, Time and Place for Auction and for Hearing on Approval of Sale, (D) Approving Procedures for the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, (E) Approving Form and Manner of Notice Thereof, and (F) Granting Related Relief [D.I. 1186] (the Bid Procedures Order ); and it appearing that this Court has jurisdiction to consider the Motion pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29, 2012; and it appearing that venue of these chapter 11 cases and the Motion in this District is proper pursuant to 28 U.S.C. 1408 and 1409; and it appearing that this matter is a core proceeding pursuant to 28 U.S.C. 157(b); and this Court having determined that the relief requested in the Motion is in the best interests of the Debtors, their estates, creditors and other parties in interest; and this Court having found that the relief requested in the Motion is justified by the facts and circumstances; and it appearing that proper and adequate notice of the Motion has been given and that, except as otherwise ordered herein, no other or further notice is necessary; and after due deliberation thereon; and good and sufficient cause appearing therefor, IT IS HEREBY FOUND AND DETERMINED THAT: A. The findings and conclusions set forth herein constitute this Court s findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. 1 01:18718383.1 Motion. Capitalized terms not otherwise defined herein are to be given the meanings ascribed to them in the 2
Case 16-10527-MFW Doc 1972-3 Filed 05/19/16 Page 4 of 18 B. This Court has jurisdiction over the Motion and over the property of the Debtors pursuant to 28 U.S.C. 157 and 1334, including the non-residential real property lease belonging to the Debtors (as modified or amended from time to time, the Lease ) with respect to the premises located at Portofino Shopping Center, Shenandoah, Montgomery County, Texas (the Premises ) to be sold, assigned, transferred, conveyed, and delivered to GOLF & TENNIS PRO SHOP, INC. d/b/a PGA TOUR Superstore or its affiliate (the Assignee ) pursuant to the terms of the agreement of assumption and assignment (the Assignment Agreement ) in substantially the form annexed to the this Order as Exhibit 1. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2) and the Court enters this Order as a final order consistent with Article III of the U.S. Constitution. Venue of these chapter 11 cases and the Motion in this district and Court is proper under 28 U.S.C. 1408 and 1409. C. The statutory predicates for the relief sought in the Motion are sections 105, 363, and 365 of title 11 of the United States Code (the Bankruptcy Code ) and Rules 2002, 6004, 6006, and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ). D. This Order constitutes a final order within the meaning of 28 U.S.C. 158(a). Notwithstanding Bankruptcy Rules 6004(h) and 6006(d), and to any extent necessary under Bankruptcy Rule 9014 and Rule 54(b) of the Federal Rules of Civil Procedure, as made applicable by Bankruptcy Rule 7054, this Court finds that there is no just reason for delay in the implementation of this Order, and directs entry of judgment as set forth herein on the date hereof. E. The Lease for the Premises constitutes property of Debtors estates, and title thereto is vested in Debtors estates within the meaning of section 541(a) of the Bankruptcy Code. 01:18718383.1 3
Case 16-10527-MFW Doc 1972-3 Filed 05/19/16 Page 5 of 18 F. Due and adequate notice of the Motion, the proposed assumption, assignment, and transfer contemplated thereby, the hearing with respect thereto, and the subject matter thereof has been provided to all parties in interest herein, and no other or further notice is necessary. A reasonable opportunity to object or be heard with respect to the Motion and the relief requested therein has been afforded to all interested persons and entities. G. The relief requested in the Motion, including with respect to the assumption, assignment, and transfer approved hereby, is in the best interests of the Debtors, their estates, creditors, and other parties in interest. The Debtors have demonstrated good, sufficient, and sound business purposes and justifications for the relief requested in the Motion. H. The Assignment Agreement was negotiated and proposed in good faith, from arms -length bargaining positions, and without collusion. Assignee is a good-faith purchaser within the meaning of section 363(m) of the Bankruptcy Code and is entitled to the protections thereof. Assignee meets the standards of good faith that were enumerated by the United States Court of Appeals for the Third Circuit in In re Abbotts Dairies of Pennsylvania, Inc., 788 F.3d 143 (3d Cir. 1986). Neither the Debtors nor Assignee have engaged in any conduct that would cause or permit the assumption, assignment, and transfer to Assignee, pursuant to the Assignment Agreement and this Order, to be avoided under section 363(n) of the Bankruptcy Code. Assignee is not an insider of the Debtors, as that term is defined in section 101 of the Bankruptcy Code, and no common identity of incorporators, directors, or controlling stockholders existed between Assignee and the Debtors. I. The proposed assumption, assignment, and transfer of the Lease complies in all respects with the terms and conditions of the Bid Procedures Order. 01:18718383.1 4
Case 16-10527-MFW Doc 1972-3 Filed 05/19/16 Page 6 of 18 J. Pursuant to the Bid Procedures Order and the results of the auction, Assignee was the winning bidder for the Lease at the auction. K. The consideration provided by Assignee to the Debtors (i) is fair and reasonable, (ii) is the highest or best offer for the Lease for the Premises, (iii) will provide a greater recovery for the Debtors creditors than would be provided by any other available alternative, and (iv) constitutes reasonably equivalent value and fair consideration under the Bankruptcy Code and under the laws of the United States, any state, territory, or possession. The Debtors are authorized to assume, assign, and transfer the Lease for the Premises free and clear of all liens, claims, interests, and encumbrances of any kind or nature whatsoever, other than (i) real estate taxes relating to periods on or after January 1, 2016 which are not yet due and payable or which are being contested in good faith and (ii) easements, rights-of-way, restrictive covenants, zoning laws, municipal ordinances, and any other minor encumbrances on title that appear on the current title report (a copy of which is attached to the Assignment Agreement as Exhibit B), because one or more of the standards set forth in sections 363(f)(1)-(5) of the Bankruptcy Code have been satisfied, provided that, any Interests or Claims (defined below) encumbering all or any portion of the proceeds that the Debtors are entitled to receive in respect of the sale or disposition of the Lease shall attach to the proceeds to be received by the Debtors in the same order, priority and validity that such Interests or Claims had in the Lease or such proceeds as of the Petition Date or pursuant to any order of the Bankruptcy Court entered in the Debtors Chapter 11 Cases. Those holders of liens, claims, interests, and encumbrances who did not object to the Motion or the relief requested therein, or who interposed and then withdrew their objections, are deemed to have consented to the Assignment Agreement pursuant to section 363(f)(2) of the Bankruptcy Code. Those holders of liens, claims, interests, and encumbrances 01:18718383.1 5