PLEDGE AGREEMENT
Exhibit
10.22
This
PLEDGE AGREEMENT (this “Agreement”)
is
dated as of June 20, 2008, among SPORT CHALET, INC.,
a
Delaware corporation (“Pledgor”),
and
BANK OF AMERICA, N.A., a national banking association, as administrative agent
for the Lenders (“Agent”)
in
connection with the Loan Agreement described below.
R
E C
I T A L S:
WHEREAS,
Pledgor is indebted to Agent and Secured Parties pursuant to that certain
Amended and Restated Loan and Security Agreement dated as of even date herewith
(as amended, restated, or otherwise modified from time to time, the
“Loan
Agreement”);
and
WHEREAS,
the parties wish to provide for the terms and conditions upon which the
Obligations shall be secured by the Pledged Collateral (as defined below);
and
WHEREAS,
this Agreement is made to secure the Obligations and in consideration of
advances, credit or other financial accommodations now or hereafter being
afforded to Borrower by Agent and Secured Parties;
NOW,
THEREFORE, for valuable consideration hereby acknowledged, the parties agree
as
follows:
DEFINITIONS;
RULES OF CONSTRUCTION
1.1. Definitions.
Initially capitalized terms used but not defined herein have the respective
meanings set forth in the Loan Agreement. As used herein, the following terms
have the meanings set forth below:
Pledged
Collateral:
collectively, (a) all the shares of capital stock and all of the membership
or
other equity interests in each Subsidiary of Pledgor, each owned beneficially
and of record by Pledgor, including the shares and membership interests listed
on Schedule I
attached
hereto and made a part hereof, and all cash, dividends, distributions, other
securities, instruments, rights, and other property at any time and from time
to
time received or receivable in respect thereof or in exchange for all or any
part thereof, including dividends, distributions, warrants, profits, rights
to
subscribe, rights to return of its contribution, conversion rights, liquidating
dividends, and other rights (subject to Section
6.1
below);
(b) all other property hereafter delivered to Agent (or any agent or bailee
holding on behalf of Agent) by Pledgor in substitution for or in addition to
any
of the foregoing, and all certificates and instruments representing or
evidencing such other property and all cash, dividends, other securities,
instruments, rights and other property at any time and from time to time
received or receivable in respect thereof or in exchange for all or any part
thereof, including dividends, distributions, warrants, profits, rights to
subscribe, conversion rights, liquidating dividends and other rights; and (c)
all proceeds of all of the foregoing.
Secured
Obligations:
all
“Obligations” (as defined in the Loan Agreement).
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1.2. Certain
Matters of Construction.
The
terms
“herein”, “hereof”, “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders. In the
computation of periods of time from a specified date to a later specified date,
“from” means “from and including,”, “through” means “through and including,” and
“to” and “until” each mean “to but excluding,”. The terms “including” and
“include” shall mean “including, without limitation” and, for purposes of each
Loan Document, the parties agree that the rule of ejusdem
generis
shall
not be applicable to limit any provision. Section titles appear as a matter
of
convenience only and shall not affect the interpretation hereof. All references
to (a) laws or statutes include all related rules, regulations, interpretations,
amendments and successor provisions; (b) any document, instrument or agreement
include any amendments, waivers and other modifications, extensions or renewals
(to the extent permitted hereby); (c) any section mean, unless the context
otherwise requires, a section of this Agreement; (d) any exhibits or schedules
mean, unless the context otherwise requires, exhibits and schedules attached
hereto, which are hereby incorporated by reference; (e) any Person include
successors and assigns; or (f) unless otherwise specified herein, discretion
of
Agent means the sole and absolute discretion of Agent. Pledgor shall have the
burden of establishing any alleged negligence, misconduct or lack of good faith
by Agent or any other Secured Party hereunder. No provision hereof shall be
construed against any party by reason of such party having, or being deemed
to
have, drafted the provision.
SECTION
2. PLEDGED
COLLATERAL
2.1 Pledge
of Collateral.
Pledgor
hereby pledges and assigns to Agent and grants to Agent a security interest
in
all of the Pledged Collateral, whether now owned or hereafter acquired, to
secure prompt payment and full performance of the Secured
Obligations.
2.2 Delivery
of Certificates.
All
certificates or instruments representing or evidencing the Pledged Collateral
must be delivered to and held by or on behalf of Agent pursuant to this
Agreement and must be in suitable form for transfer by delivery, or accompanied
by duly executed instruments of transfer or assignment in blank, all in form
and
substance satisfactory to Agent. Agent has the right, at any time after an
Event
of Default (as defined herein) has occurred and is continuing, in its reasonable
discretion and without notice to Pledgor, to transfer to or to register any
or
all of the Pledged Collateral in the name of Agent or any of its nominees.
In
addition, Agent has the right at any time to exchange certificates or
instruments representing or evidencing any or all of the Pledged Collateral
for
certificates or instruments of smaller or larger denominations.
2.3. Certain
Certificated and Non-Certificated Securities.
Each
interest in any limited liability company or partnership controlled by Pledgor,
pledged hereunder and represented by a certificate, shall be a “security” within
the meaning of Division 8 of the California Uniform Commercial Code (“Article
8”), shall be covered by Article 8 and shall at all times hereafter be
represented by a certificate. Pledgor further acknowledges and agrees that
(a)
each interest in any limited liability company or partnership controlled by
Pledgor, pledged hereunder and not represented by a certificate, shall not
be
for purposes of this Agreement and the other Loan Documents a “security” within
the meaning of Article 8 and shall not be governed by Article 8, and (b) Pledgor
shall at no time elect to treat any such interest as a “security” within the
meaning of Article 8 or issue any certificate representing such interest, in
each case unless Pledgor provides prior written notification to the Agent of
such election and promptly delivers any such certificate to Agent pursuant
to
the terms hereof.
2.4. Dividends
and Replacement Stock.
Except
as provided in Section
6.1
below,
in the event that Pledgor receives any cash, dividends, other securities,
instruments, rights or other property at any time and from time to time received
or receivable in respect of any of the Pledged Collateral, or in exchange for
all or any part thereof, including dividends, distributions, warrants, profits,
rights to subscribe, conversion rights, liquidating dividends, and other rights,
Pledgor acknowledges that the same will be received IN TRUST for Agent and
will
immediately deliver the same to Agent in original form of receipt, together
with
any stock or bond powers, assignments, endorsements, or other documents or
instruments as Agent may request to establish, protect, or perfect Agent’s
interest in respect of such Pledged Collateral.
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SECTION
3. REPRESENTATIONS
AND WARRANTIES
3.1. General
Representations and Warranties.
To
induce Agent to enter into the Loan Agreement and the other Loan Documents,
Pledgor represents and warrants that:
3.1.1
Corporate
Names; Locations.
During
the five years preceding the Closing Date, except as shown on the schedules
to
the Loan Agreement, Pledgor has not been known as or used any corporate,
fictitious or trade names, has been the surviving corporation of a merger or
combination, or has acquired any substantial part of the assets of any Person.
The chief executive offices and other places of business of Pledgor are shown
on
the schedules to the Loan Agreement. During the five years preceding the Closing
Date, Pledgor has not had any other office or place of business except as shown
in the schedules to the Loan Agreement.
3.1.2 Ownership
of Pledged Collateral.
Pledgor
is the sole legal, beneficial, and, if applicable, record owner of the Pledged
Collateral (or, in the case of after-acquired Pledged Collateral, will be the
sole such owner thereof), having good and marketable title thereto, free of
all
liens, security interests, encumbrances, or claims of any kind other than those
in favor of Agent under this Agreement.
3.1.3 Securities
Act.
All
shares of stock constituting Pledged Collateral: (a) have been duly and
validly issued in compliance with (or pursuant to a valid exception from) all
Applicable Laws (including the Securities Act of 1933, as amended (the
“Securities Act”)); (b) are fully paid, nonassessable, and free of
preemptive rights; (c) are not subject to any restrictions upon the voting
rights or upon the transfer thereof other than pursuant to the Securities Act
and any applicable “blue sky” laws; (d) constitute all securities of Pledgor’s
Subsidiaries owned beneficially and of record by Pledgor; and
(e) constitute 100% of the issued and outstanding shares of each class of
voting and non-voting stock or membership or other equity interests of Pledgor’s
Subsidiaries owned by Pledgor.
3.1.4. Representations
and Warranties in Loan Agreement Incorporated.
Without
limiting any of the foregoing representations and warranties, Pledgor represents
and warrants that each of the representations and warranties set forth in the
Loan Agreement to the extent applicable to Pledgor are true, correct and
complete as written.
3.2.
Complete
Disclosure.
No Loan
Document contains any untrue statement of a material fact regarding Pledgor
or
its properties, nor fails to disclose any material fact regarding Pledgor or
its
properties necessary to make the statements contained therein not materially
misleading. There is no fact or circumstance that Pledgor has failed to disclose
to Agent in writing that could reasonably be expected to have a Material Adverse
Effect.
SECTION
4. COVENANTS
4.1.
Covenants
of Pledgor.
Until
the Full Payment of all Secured Obligations, Pledgor shall:
4.1.1
Protect
Pledged Collateral.
Preserve and protect the Pledged Collateral.
4.1.2 No
Liens.
Not
create, incur, assume, or permit to exist any liens, encumbrances, security
interests, levies, assessments, or charges on or in any of the Pledged
Collateral, except those approved in writing by Agent.
4.1.3 No
Sales.
Not
sell, encumber, or otherwise dispose of or transfer any Pledged Collateral,
or
any right or interest therein and will: (a) not issue any other stock or
membership or other equity interests in addition to or in substitution for
the
Pledged Collateral, except to Pledgor; and (b) pledge hereunder,
immediately upon Pledgor’s acquisition (directly or indirectly) thereof, any and
all additional shares of stock or membership or other equity interests of any
of
Pledgor’s Subsidiaries.
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4.1.4 Defend
Title.
Appear
in and defend, at Pledgor’s own expense, any action or proceeding that may
affect Pledgor’s title to or Agent’s interest in the Pledged
Collateral.
4.1.5 Taxes
on Pledged Collateral.
Promptly pay and discharge all taxes, assessments, and governmental charges
or
levies imposed on the Pledgor or any of the Pledged Collateral before the same
become delinquent.
4.1.6 Further
Assurances.
Procure
or execute and deliver, from time to time, in form and substance satisfactory
to
Agent, any stock powers, bond powers, endorsements, assignments, financing
statements, estoppel certificates, or other writings deemed necessary or
appropriate by Agent to perfect, maintain, or protect Agent’s security interest
in the Pledged Collateral and the priority thereof, and take such other action
and deliver such other documents, instruments, and agreements pertaining to
the
Pledged Collateral as Agent may reasonably request to effectuate the intent
of
this Agreement.
4.1.7 Advances.
If
Agent gives value to enable Pledgor to acquire rights in or use of any Pledged
Collateral, use such value only for such purpose.
4.1.8 Records
and Other Information.
Keep
accurate and complete records of the Pledged Collateral and provide Agent with
access thereto with the right to make extracts therefrom and provide Agent
with
such other information pertaining to the Pledged Collateral as Agent may
reasonably request from time to time.
SECTION
5.AUTHORIZED
ACTION BY AGENT
5.1
Attorney-in-Fact.
Pledgor
hereby irrevocably appoints Agent as its attorney-in-fact to do (but Agent
shall
not be obligated to and shall not incur any liability to Pledgor or any third
party for failure to do) any act that Pledgor is obligated by this Agreement
to
do, and (subject to Section
6.1
below)
to exercise such rights and powers as Pledgor might exercise with respect to
the
Pledged Collateral, including the right to:
(a)
Collect
by legal proceedings or otherwise and endorse, receive and receipt for all
payments, proceeds and other sums and property now or hereafter payable on
or in
respect of the Pledged Collateral, including dividends, distributions, profits
and interest payments;
(b)
Enter
into any extension, reorganization, deposit, merger, or consolidation agreement
or other agreement pertaining to any of the Pledged Collateral, and in
connection therewith, to: (i) deposit or surrender control of the Pledged
Collateral thereunder; (ii) accept other property in exchange therefor; and
(iii) do and perform such acts and things as Agent may deem proper; and any
money or property secured in exchange therefor will be applied to the Secured
Obligations or held by Agent pursuant to the provisions of this
Agreement;
(c)
Protect
and preserve the Pledged Collateral;
(d)
If
any
Event of Default has occurred and is continuing, transfer the Pledged Collateral
to its own or its nominee’s name; and
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(e)
If
any
Event of Default has occurred and is continuing, make any compromise,
settlement, or adjustment, and take any action Agent deems advisable, with
respect to the Pledged Collateral.
5.2. Reimbursement.
Pledgor
agrees to reimburse Agent upon demand for any costs and reasonable expenses,
including attorneys’ fees, that Agent may incur while acting as Pledgor’s
attorney-in-fact under this Agreement, all of which costs and expenses are
included in the Secured Obligations and are payable upon demand. It is further
agreed and understood between the parties hereto that such care as Agent gives
to the safekeeping of its own property of like kind constitutes reasonable
care
of the Pledged Collateral when in Agent’s possession; provided,
however,
that
Agent will not be required to make any presentment, demand, or protest, or
give
any notice and need not take any action to preserve any rights against any
prior
party or any other person in connection with the Secured Obligations or with
respect to the Pledged Collateral.
5.3. Irrevocable
Interests.
All the
foregoing powers authorized in this Section
5,
being
coupled with an interest, are irrevocable so long as any of the Secured
Obligations are outstanding.
SECTION
6. TRANSFER,
VOTING, DIVIDENDS, ETC.
6.1. Prior
to Event of Default.
Notwithstanding any other provision of this Agreement, so long as no Event
of
Default has occurred and is continuing:
(a)
Pledgor
is entitled to exercise all voting powers pertaining to all shares of stock
or
membership or other equity interests constituting Pledged Collateral for all
purposes not inconsistent with the terms of this Agreement;
(b)
Pledgor
is entitled to receive and retain all dividends or distributions (other than
shares of stock or membership or other equity interests or liquidating dividends
or distributions) and all interest payments payable in respect of the Pledged
Collateral; provided,
that
such dividends, distributions, or interest payments are permitted by the terms
of the Loan Agreement and the other Loan Documents; and provided,
further,
however,
that
all shares of stock or property representing shares of stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
shares of stock constituting Pledged Collateral or resulting from a split-up,
revision, or reclassification of such Pledged Collateral or received in exchange
therefor, as a result of a merger, consolidation, or otherwise, must be paid
or
transferred directly to Agent immediately upon receipt thereof by Pledgor and
be
retained by Agent as Pledged Collateral hereunder (or applied to the Secured
Obligations in accordance with the terms of the Loan Agreement);
and
(c)
In
order
to permit Pledgor to exercise such voting powers and to receive such dividends,
Agent will, if necessary and upon the written request of Pledgor, from time
to
time, execute and deliver to Pledgor appropriate proxies.
6.2. During
Event of Default.
If any
Event of Default has occurred and while the same is continuing:
(a) Agent
or
its nominee or nominees, may, if Agent so elects by written notice to Pledgor,
have the sole and exclusive right to exercise all voting powers pertaining
to
the shares of stock or membership or other equity interests constituting Pledged
Collateral, and may exercise such powers in such manner as Agent may elect,
and
Pledgor hereby grants Agent an irrevocable proxy, coupled with an interest,
to
vote such shares of stock or membership or other equity interests; provided,
however,
that
such proxy will terminate upon termination of Agent’s security interest in the
Pledged Collateral; and
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(b) All
dividends and other distributions and profits made upon or in respect of the
Pledged Collateral and all interest payments must be paid directly to and be
retained by Agent as Pledged Collateral hereunder (or applied to the Secured
Obligations, consistent with the terms of the Loan Agreement).
SECTION
7. DEFAULT
AND REMEDIES
7.1. Events
of Default.
Any
“Event of Default” as defined in the Loan Agreement shall be an “Event
of Default”
hereunder.
7.2. Remedies
upon Default.
If an
Event of Default described in Section 11.1(j) of the Loan Agreement occurs
with
respect to Pledgor, then to the extent permitted by Applicable Law, all Secured
Obligations shall become automatically due and payable by Pledgor, without
any
action by Agent or notice of any kind. In addition, or if any other Event of
Default has occurred and is continuing, Agent may in its discretion (and shall
upon written direction of Required Lenders) do any one or more of the following
from time to time:
(a) declare
any Secured Obligations immediately due and payable, whereupon they shall be
due
and payable without diligence, presentment, demand, protest or notice of any
kind, including notice of intent to accelerate and notice of acceleration,
all
of which are hereby waived by Pledgor to the fullest extent permitted by
law;
(b) settle,
compromise, or release, on terms acceptable to Agent, in whole or in part,
any
amounts owing on the Pledged Collateral, and to extend the time of payment,
in
Agent’s name or in the name of Pledgor, in respect thereof;
(c) apply
to
the payment of the Secured Obligations, or collect the Pledged Collateral,
notwithstanding any forfeiture of interest or loss of other rights of Pledgor
against any obligor on the Pledged Collateral resulting from such
action;
(d) sell
or
otherwise dispose of the Pledged Collateral in accordance with Applicable Law,
or any part thereof, either at public or private sale, on any broker’s board or
securities exchange, in lots or in bulk, for cash, on credit, or otherwise,
with
or without representations or warranties, and upon such terms as are acceptable
to Agent; and
(e) exercise
any other default rights or remedies afforded under the Loan Agreement, any
other Loan Document, or any other agreement, by law, at equity or otherwise,
including the rights and remedies of a secured party under the UCC.
7.3. Application
of Proceeds.
The
net
cash proceeds resulting from the collection, liquidation, sale, or other
disposition of the Pledged Collateral will be applied first, to the expenses
(including all attorneys’ fees) of holding, storing, preparing for sale,
selling, collecting, liquidating, and the like, including any brokerage
commissions and stamp or transfer taxes, and then to the satisfaction of all
Secured Obligations, application as to any particular obligation or indebtedness
or against principal or interest to be in Agent’s absolute
discretion.
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7.4. Securities
Act.
If by
reason of any prohibition contained in the Securities Act, as now or hereafter
in effect, or in applicable California or other state securities laws, as now
or
hereafter in effect, or in any rules or regulations pertaining to any of the
foregoing laws, Agent believes in its sole judgment that it is compelled to
resort to one or more private sales of shares of stock constituting Pledged
Collateral to a single purchaser or a restricted group of purchasers who will
be
obliged to agree, among other things, to acquire such securities for their
own
account, for investment and not with a view to the distribution or resale
thereof, Pledgor acknowledges and agrees that private sales of such Pledged
Collateral may be held notwithstanding that such sales may be at prices and
on
other terms less favorable to Pledgor than if such Pledged Collateral were
sold
at public sale. The Pledgor further agrees that Agent has no obligation to
delay
the sale of any such Pledged Collateral for the period of time necessary to
permit registration of the Pledged Collateral, even if the issuer thereof would,
or should, agree to register such Pledged Collateral for public sale under
applicable securities laws. The Pledgor specifically agrees that private sales
made under the foregoing circumstances shall be deemed to have been made in
a
“commercially reasonable” manner.
7.5. Duty
of Agent.
Agent
is not under any duty or obligation whatsoever to collect any dividends,
interest, profits, or other payments due or accruing in respect of the Pledged
Collateral or to take any action to preserve rights in connection with any
Pledged Collateral, including making or giving any presentment, demands for
performance, notices of non-performance, protests, notices of protest, or
notices of dishonor in connection with any Pledged Collateral.
7.6. Return;
Acquittance.
Agent
may deliver any Pledged Collateral to Pledgor at any time and the receipt
thereof by Pledgor will be a complete and full acquittance in respect of the
Pledged Collateral so delivered, and Agent will thereafter be discharged from
any liability or responsibility therefor.
7.7. Remedies
Cumulative; No Waiver.
7.7.1 Cumulative
Rights.
All
covenants, conditions, provisions, warranties, guaranties, indemnities and
other
undertakings of Pledgor and each other Obligated Party contained in the Loan
Documents are cumulative and not in derogation or substitution of each other.
In
particular, the rights and remedies of Agent and Lenders are cumulative, may
be
exercised at any time and from time to time, concurrently or in any order,
and
shall not be exclusive of any other rights or remedies that Agent and Lenders
may have, whether under any agreement, by law, at equity or
otherwise.
7.7.2 Waivers.
The
failure or delay of Agent or any Lender to require strict performance by Pledgor
with any terms of the Loan Documents, or to exercise any rights or remedies
with
respect to Pledged Collateral or otherwise, shall not operate as a waiver
thereof nor as establishment of a course of dealing. All rights and remedies
shall continue in full force and effect until Full Payment of all Secured
Obligations. No modification of any terms of any Loan Documents (including
any
waiver thereof) shall be effective, unless such modification is specifically
provided in a writing directed to Pledgor and executed by Agent or the requisite
Lenders, and such modification shall be applicable only to the matter specified.
No waiver of any Default or Event of Default shall constitute a waiver of any
other Default or Event of Default that may exist at such time, unless expressly
stated. If Agent or any Lender accepts performance by Pledgor under any Loan
Documents in a manner other than that specified therein, or during any Default
or Event of Default, or if Agent or any Lender shall delay or exercise any
right
or remedy under any Loan Documents, such acceptance, delay or exercise shall
not
operate to waive any Default or Event of Default nor to preclude exercise of
any
other right or remedy.
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SECTION
8. MISCELLANEOUS
8.1. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of Pledgor and Agent
and their respective successors and assigns, except that Pledgor shall not
have
the right to assign its rights or delegate its obligations under any Loan
Documents.
8.2. Amendments.
No
modification of this Agreement shall be effective without the prior written
agreement of Agent and Pledgor.
8.3. Indemnity.
PLEDGOR
SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY
BE
INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ARISING FROM
THE NEGLIGENCE OF AN INDEMNITEE.
In no
event shall Pledgor have any obligation hereunder to indemnify or hold harmless
an Indemnitee with respect to a Claim that is determined in a final,
non-appealable judgment by a court of competent jurisdiction to result from
the
gross negligence or willful misconduct of such Indemnitee.
8.4. Notices
and Communications.
All
notices and other communications by or to a party hereto shall be in writing
and
shall be given to Pledgor, at Pledgor’s address shown on the signature pages to
the Loan Agreement, and to Agent at its address shown on the signature pages
to
the Loan Agreement, or at such other address as such party may hereafter specify
by notice in accordance with this Section
8.4.
Each
such notice or other communication shall be effective only (a) if given by
facsimile transmission, when transmitted to the applicable facsimile number,
if
confirmation of receipt is received; (b) if given by mail, three Business Days
after deposit in the U.S. mail, with first-class postage pre-paid, addressed
to
the applicable address; or (c) if given by personal delivery, when duly
delivered to the notice address with receipt acknowledged. Any written notice
or
other communication that is not sent in conformity with the foregoing provisions
shall nevertheless be effective on the date actually received by the noticed
party. Electronic and voice mail may not be used as effective notice
hereunder.
8.5. Performance
of Secured Obligations.
Agent
may, in its discretion at any time and from time to time, at Pledgor’s expense,
pay any amount or do any act required of Pledgor hereunder or otherwise lawfully
requested by Agent to (a) enforce any Loan Documents or collect any Secured
Obligations; (b) protect, insure, maintain or realize upon any Pledged
Collateral; or (c) defend or maintain the validity or priority of Agent’s Liens
in any Pledged Collateral, including any payment of a judgment, insurance
premium, any discharge of a Lien or any other claim. All payments, costs and
expenses (including Extraordinary Expenses) of Agent under this Section
8.5
shall be
reimbursed to Agent by Pledgor, on demand, with interest from the date incurred
to the date of payment thereof at the Default Rate applicable to Base Rate
Revolver Loans. Any payment made or action taken by Agent under this
Section
8.5
shall be
without prejudice to any right to assert an Event of Default or to exercise
any
other rights or remedies under the Loan Documents.
8.6. Severability.
Wherever possible, each provision hereof shall be interpreted in such manner
as
to be valid under Applicable Law. If any provision is found to be invalid under
Applicable Law, it shall be ineffective only to the extent of such invalidity
and the remaining provisions hereof shall remain in full force and
effect.
8.7. Cumulative
Effect; Conflict of Terms.
The
provisions of this Agreement and the other the Loan Documents are cumulative.
The parties acknowledge that the Loan Documents may use several limitations,
tests or measurements to regulate similar matters, and they agree that these
are
cumulative and that each must be performed as provided. Except as otherwise
provided in another Loan Document (by specific reference to the applicable
provision of this Agreement), if any provision contained herein is in direct
conflict with any provision in another Loan Document, the provision herein
shall
govern and control.
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8.8. Counterparts.
This
Agreement may be executed in counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement shall become effective when Agent has received
counterparts bearing the signatures of all parties hereto. Delivery of a
signature page of any Loan Document by telecopy shall be effective as delivery
of a manually executed counterpart of such agreement.
8.9. Entire
Agreement.
Time is
of the essence of the Loan Documents. The Loan Documents constitute the entire
contract among the parties relating to the subject matter hereof, and supersede
any and all previous agreements and understandings, oral or written, relating
to
the subject matter hereof.
8.10. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL
LAWS RELATING TO NATIONAL BANKS).
8.11. Consent
to Forum; Arbitration.
8.11.1 Forum.
PLEDGOR
HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT
SITTING IN OR WITH JURISDICTION OVER LOS ANGELES, CALIFORNIA, IN ANY PROCEEDING
OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH
PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. PLEDGOR IRREVOCABLY
WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH
COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.
EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
PROVIDED FOR NOTICES IN SECTION
8.4.
Nothing
herein shall limit the right of Agent or any Lender to bring proceedings against
Pledgor in any other court, nor limit the right of any party to serve process
in
any other manner permitted by Applicable Law. Nothing in this Agreement shall
be
deemed to preclude enforcement by Agent of any judgment or order obtained in
any
forum or jurisdiction.
8.11.2 Arbitration.
Notwithstanding any other provision of this Agreement to the contrary, any
controversy or claim among the parties relating in any way to any Secured
Obligations or Loan Documents, including any alleged tort, shall at the request
of any party hereto be determined by binding arbitration conducted in accordance
with the United States Arbitration Act (Title 9 U.S. Code). Arbitration
proceedings will be determined in accordance with the Act, the then-current
rules and procedures for the arbitration of financial services disputes of
the
American Arbitration Association (“AAA”),
and
the terms of this Section
8.11.2.
In the
event of any inconsistency, the terms of this Section
8.11.2
shall
control. If AAA is unwilling or unable to serve as the provider of arbitration
or to enforce any provision of this Section
8.11.2,
Agent
may designate another arbitration organization with similar procedures to serve
as the provider of arbitration. The arbitration proceedings shall be conducted
in Los Angeles or Pasadena, California. The arbitration hearing shall commence
within 90 days of the arbitration demand and close within 90 days thereafter.
The arbitration award must be issued within 30 days after close of the hearing
(subject to extension by the arbitrator for up to 60 days upon a showing of
good
cause), and shall include a concise written statement of reasons for the award.
The arbitrator shall give effect to applicable statutes of limitation in
determining any controversy or claim, and for these purposes, service on AAA
under applicable AAA rules of a notice of claim is the equivalent of the filing
of a lawsuit. Any dispute concerning this Section
8.11.2
or
whether a controversy or claim is arbitrable shall be determined by the
arbitrator. The arbitrator shall have the power to award legal fees to the
extent provided by this Agreement. Judgment upon an arbitration award may be
entered in any court having jurisdiction. The institution and maintenance of
an
action for judicial relief or pursuant to a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief. No controversy or claim shall be
submitted to arbitration without the consent of all parties if, at the time
of
the proposed submission, such controversy or claim relates to an obligation
secured by Real Estate, but if all parties do not consent to submission of
such
a controversy or claim to arbitration, it shall be determined as provided in
the
next sentence. At the request of any party, a controversy or claim that is
not
submitted to arbitration as provided above shall be determined by judicial
reference; and if such an election is made, the parties shall designate to
the
court a referee or referees selected under the auspices of the AAA in the same
manner as arbitrators are selected in AAA sponsored proceedings and the
presiding referee of the panel (or the referee if there is a single referee)
shall be an active attorney or retired judge; and judgment upon the award
rendered by such referee or referees shall be entered in the court in which
proceeding was commenced. None of the foregoing provisions of this Section
8.11.2
shall
limit the right of Agent or Lenders to exercise self-help remedies, such as
setoff, foreclosure or sale of any Pledged Collateral or to obtain provisional
or ancillary remedies from a court of competent jurisdiction before, after
or
during any arbitration proceeding. The exercise of a remedy does not waive
the
right of any party to resort to arbitration or reference. At Agent’s option,
foreclosure under a Mortgage may be accomplished either by exercise of power
of
sale thereunder or by judicial foreclosure.
9
8.12. Waivers
by Pledgor.
TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR WAIVES (A) THE RIGHT
TO
TRIAL BY JURY (WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY PROCEEDING
OR DISPUTE OF ANY KIND RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, SECURED
OBLIGATIONS OR PLEDGED COLLATERAL; (B) PRESENTMENT, DEMAND, PROTEST, NOTICE
OF
PRESENTMENT, DEFAULT, NON-PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT,
EXTENSION OR RENEWAL OF ANY COMMERCIAL PAPER, ACCOUNTS, DOCUMENTS, INSTRUMENTS,
CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT ON WHICH PLEDGOR MAY
IN
ANY WAY BE LIABLE, AND HEREBY RATIFIES ANYTHING AGENT MAY DO IN THIS REGARD;
(C) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF ANY PLEDGED COLLATERAL;
(D) ANY BOND OR SECURITY THAT MIGHT BE REQUIRED BY A COURT PRIOR TO
ALLOWING AGENT TO EXERCISE ANY RIGHTS OR REMEDIES; (E) THE BENEFIT OF ALL
VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (F) ANY CLAIM AGAINST AGENT OR
ANY
LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL,
EXEMPLARY OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) IN ANY
WAY RELATING TO ANY ENFORCEMENT ACTION, SECURED OBLIGATIONS, LOAN DOCUMENTS
OR
TRANSACTIONS RELATING THERETO; AND (G) NOTICE OF ACCEPTANCE
HEREOF.
Pledgor
acknowledges that the foregoing waivers are a material inducement to Agent
and
Lenders entering into the Loan Agreement and that Agent and Lenders are relying
upon the foregoing in their dealings with Pledgor. Pledgor has reviewed the
foregoing waivers with its legal counsel and has knowingly and voluntarily
waived its jury trial and other rights following consultation with legal
counsel. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
8.13. Advice
of Counsel.
Pledgor
acknowledges that it has either obtained the advice of counsel or has had the
opportunity to obtain such advice in connection with the terms and provisions
of
this Pledge Agreement.
[Remainder
of Page Intentionally Left Blank]
10
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
date first written above.
|
PLEDGOR:
|
|
|
SPORT
CHALET, INC.,
|
|
|
a
Delaware corporation
|
|
|
By:
|
/s/
Xxxxxx Xxxxxxxx
|
|
Name:
|
Xxxxxx
Xxxxxxxx
|
|
Title:
|
Executive
Vice President and CFO
|
Signature
Page
|
AGENT:
|
|
|
BANK
OF AMERICA, N.A, as agent
|
|
|
By:
|
/s/
Xxxxxxx Xxxx
|
|
Name:
|
Xxxxxxx
X. Xxxx
|
|
Title:
|
Vice
President
|
Signature
Page
SCHEDULE
I
|
Class
of Stock
|
No./
Percentage of Shares/ Membership Interests
|
|
|
1. Sport
Chalet Team Sales, Inc.
|
100
shares (100%) of common stock.
|
|
|
2. Sport
Chalet Value Services, LLC
|
100%
of membership interests
|
I-1-
STOCK
ASSIGNMENT SEPARATE FROM CERTIFICATE
Pursuant
to that certain Pledge Agreement dated as of June __, 2008, the undersigned
hereby assigns and transfers unto ____________________________________,
________________ shares of common stock of SPORT CHALET TEAM SALES, INC., a
corporation organized under the laws of the State of California, standing in
the
name of the undersigned on the books of said corporation, represented by
Certificate(s) No. ____________, and does hereby irrevocably constitute and
appoint ____________________________________as attorney to transfer said shares
of said common stock on the books of said corporation, with full powers of
substitution in the premises.
Dated:
__________________
|
SPORT
CHALET, INC.,
|
|
|
a
Delaware corporation
|
|
|
By:
|
|
|
Name:
|
Xxxxxx
Xxxxxxxx
|
|
Title:
|
Executive
Vice President and CFO
|
