Exhibit 99.5
PARENT STOCK PLEDGE AGREEMENT
THIS PARENT STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
June 7, 2001, is entered into between GART SPORTS COMPANY, a Delaware
corporation ("Pledgor"), and THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation ("Secured Party"), as agent for the Lenders, with reference to the
following:
WHEREAS, the undersigned Pledgor beneficially owns the specified
number of shares identified as Pledged Shares in the Persons identified as
Issuers on Schedule A attached hereto (or any addendum thereto);
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WHEREAS, Borrowers, the lenders that are signatories thereto, and
Secured Party, as agent, are parties to that certain Amended and Restated
Financing Agreement (the "Financing Agreement"), of even date herewith;
WHEREAS, contemporaneously herewith, Pledgor has executed and
delivered that certain General Continuing Guaranty (the "Guaranty"), in favor of
Secured Party, for the benefit of the Lender Group, respecting certain
obligations of Pledgor arising under the Additional Documents; and
WHEREAS, to induce the Lender Group to make the financial
accommodations provided to Borrowers pursuant to the Financing Agreement,
Pledgor desires to pledge, grant, transfer, and assign to Secured Party a
security interest in the Collateral (as hereinafter defined) to secure the
Secured Obligations (as hereinafter defined), as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations, and warranties set forth herein and for other good and valuable
consideration, the parties hereto agree as follows:
1. Definitions and Construction
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a. Definitions. All initially capitalized terms used herein and not
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otherwise defined herein shall have the meaning ascribed thereto in the
Financing Agreement. As used in this Agreement:
"Agreement" shall mean this Parent Stock Pledge Agreement and any
joinders, extensions, riders, supplements, notes, amendments, or modifications
to or in connection with this Agreement.
"Borrowers" shall mean Gart, Sportmart, Xxxxxx'x, and the Subsidiaries
of Xxxxxx'x signatories to the Financing Agreement (but no other Subsidiaries of
Gart, Sportmart, or Xxxxxx'x), and "Borrower" shall mean any one of them.
"Debtor's Location" shall mean where such Pledgor is deemed located
pursuant to (S)9103(3)(d), or, on and after July 1, 2001 (S)9301 of the UCC.
"Collateral" shall mean the Pledged Shares, the Future Rights, and the
Proceeds, collectively.
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"Financing Agreement" shall have the meaning ascribed thereto in the
recitals to this Agreement.
"Future Rights" shall mean: (a) all shares of stock (other than
Pledged Shares) of the Issuers, and all securities convertible or exchangeable
into, and all warrants, options, or other rights to purchase, shares of stock of
the Issuers; (b) to the extent of Pledgor's interest therein, all shares of, all
securities convertible or exchangeable into, and all warrants, options, or other
rights to purchase shares of stock of any Person in which Pledgor, after the
date of this Agreement, acquires a direct equity interest, irrespective of
whether such Person is or becomes a Subsidiary of Pledgor; and (c) the
certificates or instruments representing such additional shares, convertible or
exchangeable securities, warrants, and other rights and all dividends, cash,
options, warrants, rights, instruments, and other property or proceeds from time
to time received, receivable, or otherwise distributed in respect of or in
exchange for any or all of such shares.
"Guaranty" shall have the meaning ascribed thereto in the recitals to
this Agreement.
"Holder" and "Holders" shall have the meanings ascribed thereto in
Section 3 of this Agreement.
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"Issuers" shall mean each of the Persons identified as an Issuer on
Schedule A attached hereto (or any addendum thereto), and any successors
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thereto, whether by merger or otherwise.
"Lender Group" shall mean collectively and individually the Lenders
and Secured Party, as agent for the Lenders.
"Lenders" shall have the meaning ascribed thereto in the Financing
Agreement.
"Xxxxxx'x" shall mean Xxxxxx'x Sporting Goods, Inc., a Delaware
corporation, and each of its Subsidiaries identified on the signature pages of
the Financing Agreement.
"Pledged Shares" shall mean all of the shares identified as Pledged
Shares on Schedule A attached hereto (or any addendum thereto).
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"Pledgor" shall have the meaning ascribed thereto in the preamble to
this Agreement.
"Proceeds" shall mean all proceeds (including proceeds of proceeds) of
the Pledged Shares and Future Rights including all: (a) rights, benefits,
distributions, premiums, profits, dividends, interest, cash, instruments,
documents of title, accounts, contract rights, inventory, equipment, general
intangibles, deposit accounts, chattel paper, and other property from time to
time received, receivable, or otherwise distributed in respect of or in exchange
for, or as a replacement of or a substitution for, any of the Pledged Shares,
Future Rights, or proceeds thereof (including any cash, stock, or other
securities or instruments issued after any recapitalization, readjustment,
reclassification, merger or consolidation with respect to the Issuers and any
security entitlements, as defined in (S)8102(a)(17) of the UCC, with respect
thereto); (b) "proceeds," as such term is used in (S)9306, or on and after July
1, 2001, (S)9315 of the
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UCC; (c) proceeds of any insurance, indemnity, warranty, or guaranty (including
guaranties of delivery) payable from time to time with respect to any of the
Pledged Shares, Future Rights, or proceeds thereof; (d) payments (in any form
whatsoever) made or due and payable to Pledgor from time to time in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Pledged Shares, Future Rights, or proceeds thereof; and (e)
other amounts from time to time paid or payable under or in connection with any
of the Pledged Shares, Future Rights, or proceeds thereof.
"Secured Obligations" shall mean all liabilities, obligations, or
undertakings owing by Pledgor to Lender Group of any kind or description arising
out of or outstanding under, advanced or issued pursuant to, or evidenced by the
Financing Agreement, any other Additional Document to which Pledgor is a party,
or this Agreement, irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, voluntary or
involuntary, whether now existing or hereafter arising, and including all
interest (including interest that accrues after the filing of a case under the
Bankruptcy Code) and any and all costs, fees (including attorneys fees), and
expenses which Pledgor is required to pay pursuant to any of the foregoing, by
law, or otherwise.
"Secured Party" shall have the meaning ascribed thereto in the
preamble to this Agreement, together with its successors or assigns.
"Securities Act" shall have the meaning ascribed thereto in Section
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9(c) of this Agreement.
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b. Construction.
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(i) Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular and to the singular
include the plural, the part includes the whole, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and other similar terms in this Agreement refer to this
Agreement as a whole and not exclusively to any particular provision of this
Agreement. Article, section, subsection, exhibit, and schedule references are to
this Agreement unless otherwise specified. All of the exhibits or schedules
attached to this Agreement shall be deemed incorporated herein by reference. Any
reference to any of the following documents includes any and all alterations,
amendments, restatements, extensions, modifications, renewals, or supplements
thereto or thereof, as applicable: this Agreement, the Financing Agreement, the
Guaranty or any of the other Additional Documents.
(ii) Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against Secured Party or Pledgor, whether
under any rule of construction or otherwise. On the contrary, this Agreement has
been reviewed by both of the parties and their respective counsel and shall be
construed and interpreted according to the ordinary meaning of the words used so
as to fairly accomplish the purposes and intentions of the parties hereto.
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(iii) In the event of any direct conflict between the express
terms and provisions of this Agreement and of the Financing Agreement, the terms
and provisions of the Financing Agreement shall control.
2. Pledge. As security for the prompt payment and performance of the
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Secured Obligations when due, whether at stated maturity, by acceleration or
otherwise (including amounts that would become due but for the operation of the
provisions of the Bankruptcy Code), Pledgor hereby pledges, grants, transfers,
and assigns to Secured Party, for the benefit of the Lender Group, a security
interest in all of Pledgor's right, title, and interest in and to the
Collateral.
3. Delivery and Registration of Collateral.
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a. All certificates or instruments representing or evidencing the
Collateral shall be promptly delivered by Pledgor to Secured Party, for the
benefit of the Lender Group, or Secured Party's designee pursuant hereto at a
location designated by Secured Party and shall be held by or on behalf of
Secured Party, for the benefit of the Lender Group, pursuant hereto, and shall
be in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Secured Party.
b. Upon the occurrence and during the continuance of an Event of
Default, Secured Party, for the benefit of the Lender Group, shall have the
right, at any time in its discretion and without notice to Pledgor, except to
the extent required by applicable law, to transfer to or to register on the
books of the Issuers (or of any other Person maintaining records with respect to
the Collateral) in the name of Secured Party or any of its nominees any or all
of the Collateral. In addition, Secured Party shall have the right at any time
to exchange certificates or instruments representing or evidencing Collateral
for certificates or instruments of smaller or larger denominations.
c. If, at any time and from time to time, any Collateral (including
any certificate or instrument representing or evidencing any Collateral) is in
the possession of a Person other than Secured Party or Pledgor (a "Holder"),
then Pledgor shall immediately, at Secured Party's option, either cause such
Collateral to be delivered into Secured Party's possession, or execute and
deliver to such Holder a written notification/instruction, and take all other
steps necessary to perfect the security interest of Secured Party in such
Collateral, including obtaining from such Holder a written acknowledgement that
such Holder holds such Collateral for Secured Party, all pursuant to (S)9115,
or, on and after July 1, 2001, (S)9313 of the UCC or other applicable law
governing the perfection of Secured Party's security interest in the Collateral
in the possession of such Holder. Each such notification/instruction and
acknowledgement shall be in form and substance satisfactory to Secured Party.
d. Any and all Collateral (including dividends, interest, and other
cash distributions) at any time received or held by Pledgor shall be so received
or held in trust for Secured Party, for the benefit of the Lender Group, shall
be segregated from other funds and property of Pledgor and shall be forthwith
delivered to Secured Party in the same form as so received or held, with any
necessary endorsements; provided that cash dividends or distributions
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received by Pledgor, if and to the extent they are not prohibited by the
Financing Agreement, may be retained by Pledgor in accordance with Section 4 and
used in the ordinary course of Pledgor's business.
e. If at any time and from time to time any Collateral consists of
an uncertificated security or a security in book entry form, then Pledgor shall
immediately cause such Collateral to be registered or entered, as the case may
be, in the name of Secured Party, for the benefit of the Lender Group, or
otherwise cause Secured Party's security interest thereon to be perfected in
accordance with applicable law.
4. Voting Rights and Dividends.
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a. So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of the Financing Agreement or any of the
Additional Documents and shall be entitled to receive and retain any cash
dividends or distributions paid in respect of the Collateral, if and to the
extent they are not prohibited by the Financing Agreement.
b. Upon the occurrence and during the continuance of an Event of
Default, all rights of Pledgor to exercise the voting and other consensual
rights pertaining to the Collateral to receive and retain cash dividends or
distributions that it would otherwise be entitled to exercise or receive and
retain, as applicable pursuant to Section 4(a), shall cease, and all such rights
shall thereupon become vested in Secured Party, who shall thereupon have the
sole right, at any time in its discretion and without notice to Pledgor to
exercise such voting or other consensual rights and to receive and retain such
cash dividends and distributions. Pledgor shall execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies and other
instruments as Secured Party may reasonably request for the purpose of enabling
Secured Party to exercise the voting and other rights which it is entitled to
exercise and to receive the dividends and distributions that it is entitled to
receive and retain pursuant to the preceding sentence.
5. Representations and Warranties. Pledgor represents, warrants, and
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covenants as follows:
a. Pledgor has taken all steps it deems necessary or appropriate to
be informed on a continuing basis of changes or potential changes affecting the
Collateral (including rights of conversion and exchange, rights to subscribe,
payment of dividends, reorganizations or recapitalization, tender offers and
voting rights), and Pledgor agrees that Secured Party shall have no
responsibility or liability for informing Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto ;
b. All information herein or hereafter supplied to Secured Party by
or on behalf of Pledgor in writing with respect to the Collateral is, or in the
case of information hereafter supplied will be, taken together with all related
information so provided, accurate and complete in all material respects;
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c. Pledgor is and will be the sole legal and beneficial owner of the
Collateral (including the Pledged Shares and all other Collateral acquired by
Pledgor after the date hereof) free and clear of any adverse claim, Lien, or
other right, title, or interest of any party other than the liens in favor of
Secured Party, for the benefit of the Lender Group;
d. This Agreement, and the delivery to Secured Party, for the
benefit of the Lender Group, of the Pledged Shares representing Collateral (or
the delivery to all Holders of the Pledged Shares representing Collateral of the
notification/instruction referred to in Section 3 of this Agreement), creates a
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valid, perfected, and first priority security interest in one hundred percent
(100%) of the Pledged Shares in favor of Secured Party securing payment of the
Secured Obligations, and all actions necessary to achieve such perfection have
been duly taken;
e. Schedule A to this Agreement is true and correct and complete in
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all material respects; without limiting the generality of the foregoing: (i) all
the Pledged Shares are in certificated form, and, except to the extent
registered in the name of Secured Party or its nominee pursuant to the
provisions of this Agreement, are registered in the name of Pledgor; and (ii)
the Pledged Shares as to each of the Issuers constitute at least the percentage
of all the fully diluted issued and outstanding shares of stock of such Issuer
as set forth in Schedule A to this Agreement;
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f. There are no presently existing Future Rights or Proceeds owned
by Pledgor, except as set forth in Schedule C hereto;
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g. The Pledged Shares have been duly authorized and validly issued
and are fully paid and nonassessable; and
h. Neither the pledge of the Collateral pursuant to this Agreement
nor the extensions of credit represented by the Secured Obligations violates
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
6. Further Assurances.
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a. Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or reasonably
desirable, or that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Pledgor will: (i) at the request of Secured Party, xxxx conspicuously each of
its records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby; (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or reasonably desirable, or as
Secured Party may request, in order to perfect and preserve the security
interests granted or purported to be granted hereby; (iii) allow inspection of
the Collateral by Secured Party or Persons designated by Secured Party to the
extent provided in the Financing Agreement; and (iv) appear in and defend any
action or proceeding that may affect Pledgor's title to or Secured Party's
security interest in the Collateral.
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b. Pledgor hereby authorizes Secured Party, for the benefit of the
Lender Group, to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of Pledgor where permitted by law. A carbon, photographic, or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
7. Covenants of Pledgor. Pledgor shall:
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a. Perform each and every covenant in the Additional Documents
applicable to Pledgor;
b. At all times keep at least one complete set of its records
concerning substantially all of the Collateral at the location set forth in
Schedule B hereto;
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c. To the extent it may lawfully do so, use its best efforts to
prevent the Issuers from issuing Future Rights or Proceeds, except for cash
dividends and other distributions, if any, that are not prohibited by the terms
of the Financing Agreement to be paid by any Issuer to Pledgor; and
d. Upon receipt by Pledgor of any material notice, report, or other
communication from any of the Issuers or any Holder relating to all or any part
of the Collateral, deliver such notice, report or other communication to Secured
Party as soon as possible, but in no event later than five (5) days following
the receipt thereof by Pledgor.
8. Secured Party as Pledgor's Attorney-in-Fact.
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a. Pledgor hereby irrevocably appoints Secured Party as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor, Secured Party or otherwise, from time to time at Secured
Party's discretion, to take any action and to execute any instrument that
Secured Party may reasonably deem necessary or advisable to accomplish the
purposes of this Agreement, including: (i) upon the occurrence and during the
continuance of an Event of Default, to receive, endorse, and collect all
instruments made payable to Pledgor representing any dividend, interest payment
or other distribution in respect of the Collateral or any part thereof to the
extent permitted hereunder and to give full discharge for the same and to
execute and file governmental notifications and reporting forms; (ii) to issue
any notifications/instructions Secured Party deems necessary pursuant to Section
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3 of this Agreement; or (iii) to arrange for the transfer of the Collateral on
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the books of any of the Issuers or any other Person to the name of Secured Party
or to the name of Secured Party's nominee.
b. In addition to the designation of Secured Party as Pledgor's
attorney-in-fact in subsection (a), following the occurrence and during the
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continuation of an Event of Default, Pledgor hereby irrevocably appoints Secured
Party as Pledgor's agent and attorney-in-fact to make, execute and deliver any
and all documents and writings which may be necessary or appropriate for
approval of, or be required by, any regulatory authority located in any city,
county, state or country where Pledgor or any of the Issuers engage in business,
in order to transfer or to more effectively transfer any of the Pledged Shares
or otherwise enforce Secured Party's rights hereunder.
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9. Remedies upon Default. Upon the occurrence and during the continuance
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of an Event of Default:
a. Secured Party, for the benefit of the Lender Group, may exercise
in respect of the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (irrespective of whether the UCC applies
to the affected items of Collateral), and Secured Party may also without notice
(except as specified below) sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board or at
any of Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as are commercially reasonable, irrespective of the impact of any such
sales on the market price of the Collateral. To the maximum extent permitted by
applicable law, Secured Party may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply all or any part of
the Secured Obligations as a credit on account of the purchase price of any
Collateral payable at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay, or appraisal that it now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted. Pledgor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) calendar days notice to Pledgor of the time and place of any public sale or
the time after which a private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. To the maximum extent permitted
by law, Pledgor hereby waives any claims against Secured Party arising because
the price at which any Collateral may have been sold at such a private sale was
less than the price that might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree.
b. Pledgor hereby agrees that any sale or other disposition of the
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, or other financial institutions in the City of Los
Angeles, California in disposing of property similar to the Collateral shall be
deemed to be commercially reasonable.
c. Pledgor hereby acknowledges that the sale by Secured Party, for
the benefit of the Lender Group, of any Collateral pursuant to the terms hereof
in compliance with the Securities Act of 1933 as now in effect or as hereafter
amended, or any similar statute hereafter adopted with similar purpose or effect
(the "Securities Act"), as well as applicable "Blue Sky" or other state
securities laws may require strict limitations as to the manner in which Secured
Party or any subsequent transferee of the Collateral may dispose thereof.
Pledgor hereby acknowledges and agrees that in order to protect Secured Party's
interest it may be necessary to sell the Collateral at a price less than the
maximum price attainable if a sale were delayed or were made in another manner,
such as a public offering under the Securities Act. Pledgor has no objection to
sale in such a manner and agrees that Secured Party shall have no
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obligation to obtain the maximum possible price for the Collateral. Without
limiting the generality of the foregoing, Pledgor hereby agrees that, upon the
occurrence and during the continuation of an Event of Default, Secured Party
may, subject to applicable law, from time to time attempt to sell all or any
part of the Collateral by a private placement, restricting the bidders and
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution. In so doing, Secured
Party may solicit offers to buy the Collateral or any part thereof for cash,
from a limited number of investors deemed by Secured Party, in its reasonable
judgment, to be institutional investors or other responsible parties who might
be interested in purchasing the Collateral. If Secured Party shall solicit such
offers, then the acceptance by Secured Party of one of the offers shall be
deemed to be a commercially reasonable method of disposition of the Collateral.
d. If Secured Party, for the benefit of the Lender Group, shall
determine to exercise its right to sell all or any portion of the Collateral
pursuant to this Section, Pledgor agrees that, upon request of Secured Party,
Pledgor will, at its own expense:
(i) use its best efforts to execute and deliver, and cause the
Issuers and the directors and officers thereof to execute and deliver, all such
instruments and documents, and to do or cause to be done all such other acts and
things, as may be necessary or, in the opinion of Secured Party, advisable to
register such Collateral under the provisions of the Securities Act, and to
cause the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the related
prospectuses which, in the opinion of Secured Party, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto;
(ii) use its best efforts to qualify the Collateral under the
state securities laws or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by Secured
Party;
(iii) cause the Issuers to make available to their respective
security holders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act;
(iv) execute and deliver, or cause the officers and directors of
the Issuers to execute and deliver, to any person, entity or governmental
authority as Secured Party may choose, any and all documents and writings which,
in Secured Party's reasonable judgment, may be necessary or appropriate for
approval, or be required by, any regulatory authority located in any city,
county, state or country where Pledgor or the Issuers engage in business, in
order to transfer or to more effectively transfer the Pledged Shares or
otherwise enforce Secured Party's rights hereunder; and
(v) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
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Pledgor acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of this Section and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
e. PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW:
(i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME
SECURED PARTY DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN THIS
SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS OR
MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING
OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS
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SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
10. Application of Proceeds. Upon the occurrence and during the
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continuance of an Event of Default, any cash held by Secured Party, for the
benefit of the Lender Group, as Collateral and all cash proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral pursuant to the exercise by Secured Party
of its remedies as a secured creditor as provided in Section 9 shall be applied
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from time to time by Secured Party as provided in the Financing Agreement.
11. Duties of Secured Party. The powers conferred on Secured Party, for
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the benefit of the Lender Group, hereunder are solely to protect its interests
in the Collateral and shall not impose on it any duty to exercise such powers.
Except as provided in Section 9207 of the UCC, Secured Party shall have no duty
with respect to the Collateral or any responsibility for taking any necessary
steps to preserve rights against any Persons with respect to any Collateral.
12. Choice of Law and Venue. THE VALIDITY OF THIS AGREEMENT, ITS
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CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF SECURED PARTY, IN ANY
OTHER COURT IN WHICH SECURED PARTY, FOR THE BENEFIT OF THE LENDER GROUP, SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF PLEDGOR AND SECURED PARTY,
FOR THE BENEFIT OF THE LENDER GROUP, WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 12.
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13. Amendments; Etc. No amendment or waiver of any provision of this
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Agreement nor consent to any departure by Pledgor herefrom shall in any event be
effective unless the same
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shall be in writing and signed by Secured Party, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of Secured Party to exercise, and no
delay in exercising any right under this Agreement, any other Additional
Document, or otherwise with respect to any of the Secured Obligations, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under this Agreement, any other Additional Document, or otherwise with
respect to any of the Secured Obligations preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided for in this
Agreement or otherwise with respect to any of the Secured Obligations are
cumulative and not exclusive of any remedies provided by law.
14. Notices. Unless otherwise specifically provided herein, any notice or
-------
other communication herein required or permitted to be given shall be in writing
and shall be delivered in the manner set forth in the Guaranty.
15. Continuing Security Interest. This Agreement shall create a continuing
----------------------------
security interest in the Collateral and shall: (i) remain in full force and
effect until the indefeasible payment in full of the Secured Obligations,
including the cash collateralization, expiration, or cancellation of all Secured
Obligations, if any, consisting of letters of credit, and the full and final
termination of any commitment to extend any financial accommodations under the
Financing Agreement; (ii) be binding upon Pledgor and its successors and
assigns; and (iii) inure to the benefit of Secured Party and its successors,
transferees, and assigns. Upon the indefeasible payment in full of the Secured
Obligations, including the cash collateralization, expiration, or cancellation
of all Secured Obligations, if any, consisting of letters of credit, and the
full and final termination of any commitment to extend any financial
accommodations under the Financing Agreement, the security interests granted
herein shall automatically terminate and all rights to the Collateral shall
revert to Pledgor. Upon any such termination, Secured Party will, at Pledgor's
expense, execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination. Such documents shall be
prepared by Pledgor and shall be in form and substance reasonably satisfactory
to Secured Party.
16. Security Interest Absolute. To the maximum extent permitted by law,
--------------------------
all rights of Secured Party, all security interests hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:
a. any lack of validity or enforceability of any of the Secured
Obligations or any other agreement or instrument relating thereto, including the
Financing Agreement or any of the Additional Documents;
b. any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Financing Agreement or any of
the Additional Documents, or any other agreement or instrument relating thereto;
c. any exchange, release, or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty for all or any of the Secured Obligations; or
11
d. any other circumstances that might otherwise constitute a defense
available to, or a discharge of, Pledgor.
To the maximum extent permitted by law, Pledgor hereby waives any right to
require Secured Party to: (A) proceed against or exhaust any security held from
Pledgor; or (B) pursue any other remedy in Secured Party?s power whatsoever.
17. Headings. Section and subsection headings in this Agreement are
--------
included herein for convenience of reference only and shall not constitute a
part of this Agreement or be given any substantive effect.
18. Severability. In case any provision in or obligation under this
------------
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
19. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
Delivery of an executed counterpart of this Agreement by telefacsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver a manually executed counterpart of this
Agreement but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.
20. Waiver of Marschaling. Each of Pledgor and Secured Party acknowledges
---------------------
and agrees that in exercising any rights under or with respect to the
Collateral: (i) Secured Party is under no obligation to marshal any Collateral;
(ii) may, in its absolute discretion, realize upon the Collateral in any order
and in any manner it so elects; and (iii) may, in its absolute discretion, apply
the proceeds of any or all of the Collateral to the Secured Obligations in any
order and in any manner it so elects. Pledgor and Secured Party waive any right
to require the marshaling of any of the Collateral.
21. Waiver of Jury Trial.
--------------------
PLEDGOR AND SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. PLEDGOR AND SECURED PARTY REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Remainder of page intentionally left blank]
12
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their officers thereunto duly
authorized as of the date first written above.
GART SPORTS COMPANY,
a Delaware corporation
By _________________________________
Name: ______________________________
Title: _____________________________
THE CIT GROUP/BUSINESS CREDIT, INC.,
a New York corporation, as Agent
By _________________________________
Name: ______________________________
Title: _____________________________
S-1
SCHEDULE A
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Pledgor: GART SPORTS COMPANY, a Delaware corporation
Pledged Shares
--------------
Former
Name, if Pledgor's
any, in Percentage
which Ownership Jurisdiction
Number of Certificate Certificate (Percentage of
Issuer Shares Class Number(s) Issued Pledged) Incorporation
----------------------------- ----------- --------- --------------- --------------- --------------- ---------------
Gart Bros. Sporting Goods 100% / (100%) Colorado
Xxxxxx'x Sporting Goods, Inc.
(formerly known as GSC
Acquisition Corp.) 100% / (100%) Delaware
A-1
SCHEDULE B
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Pledgor: GART SPORTS COMPANY, a Delaware corporation
Address of Debtor's Location: 0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
B-1
SCHEDULE C
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Existing Future Rights and Proceeds: None.
C-1
