1
EXHIBIT 10.42
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is made effective as of April
24, 2000, by and among Callaway Golf Company, a Delaware corporation ("Callaway
Golf"), Sanwa Bank California, a California corporation ("Sanwa") and Arrowhead
Trust Incorporated, a California trust company ("Arrowhead").
BACKGROUND
A. On or about July 14, 1995, Callaway Golf and Sanwa entered
into that certain Trust Agreement (the "Trust Agreement").
B. On or about September 13, 1995, pursuant to a Stock Purchase
Agreement dated July 14, 1995, Sanwa, as trustee under the Trust Agreement,
executed and delivered to Callaway Golf a Non-Recourse Promissory Note dated
September 13, 1995, made payable to Callaway Golf in the original principal
amount of $60,575,000 (the "First Promissory Note"), and in exchange therefor
purchased 4,000,000 shares of Callaway Golf Common Stock, as evidenced by Stock
Certificate No. NY 17202 (the "First Stock Certificate").
C. On or about December 29, 1995, pursuant to a Stock Purchase
Agreement dated December 21, 1995, Sanwa, as trustee under the Trust Agreement,
executed and delivered to Callaway Golf a Non-Recourse Promissory Note dated
December 29, 1995, made payable to Callaway Golf in the original principal
amount of $26,262,600 (the "Second Promissory Note"), and in exchange therefor
purchased 1,300,000 shares of Callaway Golf Common Stock, as evidenced by Stock
Certificate No. NY 17213 (the "Second Stock Certificate).
D. On or about April 21, 2000, Sanwa sold to Arrowhead a portion
of it's trust business, including its rights and obligations with respect to the
First Promissory Note and the Second Promissory Note (collectively, the
"Notes"), the shares of Callaway Golf Common Stock represented by the First
Stock Certificate and the Second Stock Certificate (collectively, the "Acquired
Shares"), the Trust Agreement and the Trust Fund.
▇. ▇▇▇▇▇▇▇▇ Golf is willing to consent to the transfer of the
Assigned Documents (hereafter defined) to Arrowhead only upon the following
terms and conditions:
AGREEMENT
1. Assignment. Sanwa does hereby assign, transfer and convey to
Arrowhead all of its right, title and interest in and to (i) the Trust
Agreement, (ii) the Notes, (iii) the Acquired Shares, including the First Stock
Certificate and the Second Stock Certificate, (iv) the Trust Fund (as such term
is used in the Trust Agreement), including all amounts held in the Trust Fund,
(v) all reports, documents and other records relating in any manner whatsoever
to the Trust Agreement or the Trust Fund
2
and (vi) any other rights, agreements or instruments relating to any of the
items referred to in items (i) through (v) of this sentence (collectively, the
"Assigned Documents").
2. Assumption. Arrowhead does hereby accept the assignment set forth in
Section 1 and does hereby agree as successor Trustee (as such term is used in
the Trust Agreement) to pay, perform and discharge when due all of Sanwa's
obligations under the Assigned Documents, including any obligation arising prior
to the date hereof which has not been paid, performed or discharged prior to the
effectiveness of this Assignment and Assumption Agreement.
3. Consent. Callaway Golf does hereby consent to the assignment and
assumption of the Assigned Documents as set forth above in Section 1 and Section
2.
4. Further Assurances. Sanwa and Arrowhead agree to execute and deliver
such other agreements, documents and instruments as Callaway Golf may reasonably
request to further effect the transfer from Sanwa to Arrowhead of all rights and
obligations being assigned and assumed hereunder and all other related rights
and obligations.
5. Notice. The address to where notice may be given to Arrowhead under
any of the Assigned Documents, including but not limited to, any notice
provisions thereunder, shall be as follows:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trust Officer
Employee Benefit Department
Arrowhead Trust Incorporated
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
6. Settlement of Accounts. Sanwa Agrees to provide by September 30,
2000, or such later date as Sanwa and Callaway Golf shall mutually agree, the
written account statement required by Section 10.2 of the Trust Agreement.
7. Counterparts. This Assignment and Assumption Agreement may be
executed in one or more counterparts all of which taken together shall
constitute one and the same instrument.
2
3
IN WITNESS WHEREOF, the undersigned have executed this Assignment and
Assumption Agreement as of the date first set forth above.
SANWA BANK CALIFORNIA:
By:
--------------------------------
Print Name:
Print Title:
ARROWHEAD TRUST INCORPORATED:
By:
--------------------------------
Print Name:
Print Title:
CALLAWAY GOLF COMPANY:
By:
--------------------------------
Print Name:
Print Title:
