December 28, 2008
Exhibit
99.2
December
28, 2008
SPORT
CHALET, INC.
One Sport
Chalet Drive
La
Canada, California 91011
Attention: Xxxxxx
Xxxxxxxx
|
|
Re:
|
Turnaround
Consultant
|
Ladies
and Gentlemen:
Reference is made to that certain Loan
and Security Agreement, dated as of June 20, 2008 (as amended, restated, or
otherwise modified from time to time, the “Loan Agreement”), by and among
the financial institutions party thereto from time to time (collectively, “Lenders”), Bank of America,
N.A., as a Lender and as administrative agent for the Lenders (in its capacity
as administrative agent, “Agent”), Sport Chalet, Inc., a
Delaware corporation (“Borrower”), and each of
Borrower’s Subsidiaries party thereto from time to time as Obligated
Parties. Initially capitalized terms used but not defined herein have
the respective meanings set forth in the Loan Agreement.
In
connection with, the First Amendment to Amended and Restated Loan and Security
Agreement and Limited Forbearance Agreement dated as of even date herewith by
and among the Obligated Parties, the Agent and the Lenders (the “First Amendment”), and as a
material inducement to the Agent and the Lenders to enter into such amendment
and provide the forbearance set forth therein, the Agent and the Lenders have
requested and the Borrower has agreed to engage a certified turnaround
professional (the “Consultant”) on or before
January 12, 2009. The Consultant will be chosen by Xxxxxxxx’s Board
of Directors and must otherwise be acceptable to the Agent and the
Lenders. Without limiting the duties of the Consultant as identified
by the Borrower’s Board of Directors, the Consultant will be empowered to
prepare cash flow and operating budgets to be presented periodically to the
Board of Directors and copies of such documents will be delivered to and
discussed with the Agent. Such engagement of the Consultant shall be
for a minimum term of 90 days; provided that the Agent and
the Lenders shall have the discretion to shorten such term at the request of the
Borrower if certain operating metrics to be determined, but in any event
acceptable to the Agent and the Lenders, have been achieved. Any
failure of the Borrower to comply with the terms of this letter shall constitute
an Event of Default under this Loan Agreement and the termination of the Limited
Forbearance Period as defined in the First Amendment.
This letter may not be amended or
modified except in a writing signed by the Obligated Parties, the Agent and the
Lenders.
This letter may be executed in any
number of counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one agreement and shall be considered to
be a Loan Document. This letter, together with the Loan Agreement and
the other Loan Documents, embodies the entire agreement among the parties with
respect to the subject matter hereof and amends and supersedes all prior
agreements and understandings relating to such subject matter. This letter
shall be governed by the laws of the State of California. To the
extent not prohibited by applicable law, each of the parties hereto waives its
right to a trial by jury, if any, in any action to enforce, defend, interpret,
or otherwise concerning this letter. Without limiting the
applicability of any other provision of the Loan Agreement, the terms of Sections 14.14
and 14.15 of
the Loan Agreement are incorporated herein, mutatis mutandis, and shall
apply to and govern this Letter.
[Remainder
of Page Intentionally Left Blank]
Please
evidence your agreement to the forgoing by executing this letter in the space
provided below.
|
Very
truly yours,
BANK
OF AMERICA, N.A.
By: /s/ Xxxxxxx
Xxxx
Name: Xxxxxxx
Xxxx
Title: SVP
|
2
Accepted
and Agreed to as of the date first set forth
above:
SPORT
CHALET, INC.,
a
Delaware corporation
By: /s/ Xxxxxx
Xxxxxxxx
Name: Xxxxxx
Xxxxxxxx
Title: EVP
& CFO
Acknowledged,
as of the date first set forth above:
SPORT
CHALET VALUE SERVICES, LLC,
a
Virginia limited liability company
By: /s/ Xxxxxx
Xxxxxxxx
Name: Xxxxxx
Xxxxxxxx
Title: Manager
3
