Exhibit 99.4
COMPANY STOCK PLEDGE AGREEMENT
THIS COMPANY STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
June 7, 2001, is entered into by and among GART BROS. SPORTING GOODS COMPANY, a
Colorado corporation ("Gart"), SPORTMART, INC., a Delaware corporation
("Sportmart"), XXXXXX'X SPORTING GOODS, INC., a Delaware corporation formerly
named GSC Acquisition Corp., a Delaware corporation ("Xxxxxx'x Parent"), and
each of the Subsidiaries of Xxxxxx'x Parent identified on the signature pages of
the Financing Agreement (such Subsidiaries together with Xxxxxx'x Parent are
referred to hereinafter as "Xxxxxx'x", and Gart, Sportmart and Xxxxxx'x are
referred to herein collectively as, the "Pledgors" and each individually a
"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 Pledgors beneficially own 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, Pledgors, 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; and
WHEREAS, to induce the Lender Group to make the financial
accommodations provided to Pledgors pursuant to the Financing Agreement,
Pledgors desire 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 Company Stock Pledge Agreement and any
joinders, extensions, riders, supplements, notes, amendments, or modifications
to or in connection with this Agreement.
"Collateral" shall mean the Pledged Shares, the Future Rights, and the
Proceeds, collectively.
"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.
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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 any 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 any Pledgor,
after the date of this Agreement, acquires a direct equity interest,
irrespective of whether such Person is or becomes a Subsidiary of any such
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.
"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.
"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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"Pledgors" and "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 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 any 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;
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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 any 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 any
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 any 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, 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 any 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.
(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),
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each Pledgor hereby pledges, grants, transfers, and assigns to Secured Party,
for the benefit of the Lender Group, a security interest in all of such
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 Pledgors 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 Pledgors, 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 a Pledgor (a "Holder"),
then Pledgors 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 Pledgors 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 Pledgors 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
received by Pledgors, if and to the extent they are not prohibited by the
Financing Agreement, may be retained by Pledgors in accordance with Section 4
and used in the ordinary course of Pledgors' businesses.
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 such Pledgor
shall immediately cause such Collateral to be registered or entered, as the case
may be, in the name of Secured
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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, Pledgors 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 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 Pledgors 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 to exercise such voting or other consensual rights and to receive and
retain such cash dividends and distributions. Pledgors 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. Each Pledgor represents, warrants,
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and 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;
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
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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 one or more of the
Pledgors; 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 any 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. Each Pledgor agrees that from time to time, at the expense of
such Pledgor, such 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, each 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 any Pledgor's title to or Secured Party's
security interest in the Collateral.
b. Each 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 such 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.
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7. Covenants of Pledgor. Each Pledgor shall:
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a. Perform each and every covenant in the Financing Agreement and
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. Each Pledgor hereby irrevocably appoints Secured Party as such
Pledgor's attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such 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 such 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 3 of this Agreement; or (iii) to arrange for the transfer of
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the Collateral on 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 Pledgors'
attorney-in-fact in subsection (a), following the occurrence and during
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continuation of an Event of Default, each Pledgor hereby irrevocably appoints
Secured Party as Pledgors' 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 any 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.
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
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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 any
Pledgor, and, each Pledgor hereby waive (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. Each Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) calendar days notice to such 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, each 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. Each 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. Each 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. Each 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. Each Pledgor
has no objection to sale in such a manner and agrees that Secured Party shall
have no obligation to obtain the maximum possible price for the Collateral.
Without limiting the generality of the foregoing, each 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
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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, each Pledgor agrees that, upon request of Secured
Party, such 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 such 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.
Each 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.
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e. EACH 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)
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OF THIS 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 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 any Pledgor herefrom shall in any
event be effective unless the same 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, the Financing 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
10
of any right under this Agreement, the Financing 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 Financing Agreement.
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 each 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 such Pledgor. Upon any such termination, Secured Party will, at
Pledgors' expense, execute and deliver to such Pledgor such documents as such
Pledgor shall reasonably request to evidence such termination. Such documents
shall be prepared by such 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 Pledgors 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
d. any other circumstances that might otherwise constitute a defense
available to, or a discharge of, Pledgors.
11
To the maximum extent permitted by law, each 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 Marshaling. Each 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. Each Pledgor and Secured Party waive any right
to require the marshaling of any of the Collateral.
21. Waiver of Jury Trial
--------------------
EACH 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. EACH 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, Pledgors 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.
THE CIT GROUP/BUSINESS CREDIT, INC.,
a New York corporation, as Agent
By__________________________________
Title:______________________________
GART BROS. SPORTING GOODS COMPANY, a Colorado
corporation
By__________________________________
Title:______________________________
SPORTMART, INC., a Delaware corporation
By__________________________________
Title:______________________________
XXXXXX'X SPORTING GOODS, INC., a Delaware
corporation
By__________________________________
Title:______________________________
S-1
SCHEDULE A
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Pledgor: GART BROS. SPORTING GOODS COMPANY, a Colorado 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
------------ ------------- ----------- -------------- ---------------- -------------- ---------------
Sportmart, Inc. 100%/(100%) Delaware
A-1
Pledgor: XXXXXX'X SPORTING GOODS, INC., 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
------------ ------------- ----------- -------------- ---------------- -------------- ---------------
Xxxxxx Sporting 100%/(100%) Texas
Goods Co.,
Oklahoma
Xxxxxx Sporting 100%(100%) Delaware
Goods Co.,
Louisiana
Xxxxxx Sporting 100%/(100%) Texas
Goods Co.,
Tennessee
Xxxxxx Sporting 100%/(100%) Delaware
Goods, Inc. -
Services
A-2
SCHEDULE B
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Pledgor: GART BROS. SPORTING GOODS COMPANY, a Colorado corporation
Address of Debtor's Location: 0000 Xxxxxxxx, Xxxxxx, Xxxxxxxx
Pledgor: SPORTMART, INC., a Delaware corporation
Address of Debtor's Location: 0000 Xxxxxxxx, Xxxxxx, Xxxxxxxx
Pledgor: XXXXXX'X SPORTING GOODS, INC., a Delaware corporation
Address of Debtor's Location: 0000 Xxxxxxxx, Xxxxxx, Xxxxxxxx
B-1
SCHEDULE C
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Existing Future Rights and Proceeds: None.
C-1
