SECOND AMENDMENT TO AMENDED AND RESTATED lOAN AND SECURITY AGREEMENT AND LIMITED FORBEARANCE AGREEMENT
EXHIBIT
99.1
SECOND
AMENDMENT TO AMENDED
AND
RESTATED lOAN AND SECURITY AGREEMENT
AND
LIMITED FORBEARANCE AGREEMENT
This
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is dated as
of January 29, 2009, and is entered into by and among SPORT CHALET, INC., a
Delaware corporation (the “Borrower”), SPORT CHALET VALUE
SERVICES, LLC, a Virginia limited liability company (“SCVS”, and together with the
Borrower, the “Obligated
Parties”, and each individually, an “Obligated Party”), the
financial institutions that are now or that hereafter become a party to the Loan
Agreement (as defined below) (collectively, the “Lenders”, and each
individually a “Lender”)
and BANK OF AMERICA, N.A., a national banking association, as agent for the
Lenders (the “Agent”).
RECITALS
WHEREAS,
the Lenders, the Agent, and the Obligated Parties have entered into that certain
Amended and Restated Loan and Security Agreement (as amended, restated, or
otherwise modified from time to time, the “Loan Agreement”), dated as of
June 20, 2008;
WHEREAS,
the Lenders, the Agent, and the Obligated Parties have entered into that certain
First Amendment to Amended and Restated Loan and Security Agreement and Limited
Forbearance Agreement (as amended, restated, or otherwise modified from time to
time, the “First
Amendment”), dated as of December 28, 2008;
WHEREAS,
the Obligated Parties have requested that Lenders and Agent extend the Limited
Forbearance Period to March 2, 2009.
WHEREAS, the
Lenders and the Agent have agreed to extend the Limited Forbearance Period on
the terms and conditions set forth below.
WHEREAS,
the parties hereto are entering into this Amendment with the understanding and
agreement that, except as expressly set forth herein, none of the Agent’s nor
the Lenders’ rights or remedies as set forth in the Loan Agreement and the other
Loan Documents are being waived or modified by the terms of this
Amendment.
NOW,
THEREFORE, in consideration of the mutual conditions and agreements set forth in
the Loan Agreement and this Amendment, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE
I
DEFINITIONS
Section 1.1 Definitions. Initially
capitalized terms used but not otherwise defined in this Amendment have the
meanings given thereto in the Loan Agreement, as amended hereby, and the First
Amendment, as amended hereby.
ARTICLE
II
AMENDMENT
Section 2.1 Limited Forbearance
Period. As used herein and in the First Amendment, the “Limited Forbearance Period”
means the period ending on the date which is the earlier of (a) the occurrence
of any Default or Event of Default (other than the Existing Event of Default and
the Excluded Defaults); or (b) March 2, 2009. Nothing herein shall
constitute an agreement or commitment of Lenders or Agent to extend the Limited
Forbearance Period beyond March 2, 2009. Any such extension shall be
in the sole discretion of Lenders and Agent.
Section 2.2 Reservation of Rights; No
Waiver. Subject to the terms of the Loan Agreement and the
First Amendment, the Agent and the Lenders reserve the right, in
their sole discretion, to exercise any or all of their rights and remedies
hereunder and under the Loan Documents and applicable law as a result of any
other Defaults or Events of Default occurring at any time. The Agent
and the Lenders have not waived, and are not by this Amendment waiving, the
Existing Event of Default or any other Defaults or Events of Default that may be
continuing on the date hereof or any other Defaults or Events of Default that
may otherwise exist or occur after the date of this Amendment (whether the same
or similar to the Existing Event of Default or otherwise), and the Agent and the
Lenders have not agreed to forbear with respect to any of their rights or
remedies concerning any other Defaults or Events of Default occurring at any
time (other than the Existing Event of Default, solely during the Limited
Forbearance Period and solely to the extent expressly set forth
herein). Nothing in this Amendment, and no delay on the part of the
Agent or the Lenders in exercising any of their rights or remedies under the
Loan Documents or applicable law, may be construed as a waiver of any of such
rights or remedies.
ARTICLE
III
ACKNOWLEDGEMENTS
Section 3.1 Acknowledgements by
Obligated Parties. As a material inducement to the Agent and
the Lenders to enter into this Amendment, each of the Obligated Parties hereby
acknowledges, confirms, represents, warrants, and agrees that:
(a) Recitals
True. Each of the Recitals set forth above is true and
correct.
(b) Acknowledgment of Liens and
Obligations. The Borrower is indebted to the Agent and the
Lenders pursuant to the Loan Agreement and all of the Obligations are owing by
the Borrower to the Agent and the Lenders without offset, defense, or
counterclaim of any kind, nature, or description whatsoever) and the Agent has
and will continue to have valid, enforceable, and perfected first-priority liens
upon, and security interests in, all of the Collateral as security for the
Obligations. No Obligated Party will contest any of the
foregoing.
(c) Binding Effect of
Documents. (i) Each Loan Document to which any Obligated Party is a
party has been duly executed and delivered to the Agent and the Lenders by such
Obligated Party, and each such Loan Document is and will remain in full force
and effect as of the date of this Amendment (and after giving effect hereto);
(ii) the agreements and obligations of the Obligated Parties contained in
the Loan Documents and in this Amendment constitute the legal, valid, and
binding obligations of such Obligated Parties, enforceable against such
Obligated Parties in accordance with their respective terms; and no Obligated
Party has any valid defense to the enforcement of the Obligations; and
(iii) the Agent and the Lenders are and will be entitled to the rights,
remedies, and benefits provided for hereunder and under the Loan Documents and
applicable law.
(d) No New Defaults. No
Default or Event of Default has occurred other than the Existing Event of
Default and the Excluded Defaults referred to in Sections 3.2(c) and (e) of the
First Amendment.
(e) Power and Authority.
Such Obligated Party has all requisite power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, this Amendment and under the Loan Agreement as amended by
this Amendment.
(f) Authorization of
Agreements. The execution and delivery of this Amendment by such
Obligated Party and the performance by the Obligated Parties of the Loan
Agreement as amended hereby, have been duly authorized by all necessary action,
and this Amendment has been duly executed and delivered by such Obligated
Party.
(g) Representations and
Warranties in the Loan Agreement. Each Obligated Party
confirms that, as of the date hereof, the representations and warranties
contained in the Loan Agreement and each other Loan Document are true and
correct in all material respects as set forth in the Loan Agreement or such
other Loan Document (except as otherwise set forth herein and in the First
Amendment, and except to the extent any such representation and warranty is
expressly stated to have been made as of a specific date, in which case it is
true and correct as of such specific date).
The
acknowledgements, confirmations, representations, warranties, and agreements
made by the Obligated Parties above will survive the execution and delivery
hereof and the termination of the Limited Forbearance Period.
ARTICLE
IV
CONDITIONS
PRECEDENT
Section 4.1 Conditions
Precedent. This Amendment shall not be binding upon the
Lenders and the Agent until each of the following conditions precedent has been
satisfied in form and substance satisfactory to the Agent and Agent has informed
Borrower in writing that such conditions precedent have either been
satisfied or waived by Agent.
(a) The
representations and warranties contained herein and in the Loan Agreement, as
amended hereby, shall be true and correct in all material respects as of the
date hereof as if made on the date hereof, except for such representations and
warranties limited by their terms to a specific date (such representations and
warranties being true and correct in all material respects as of the specified
date relative thereto);
(b) No
Default or Event of Default shall have occurred and be continuing other than the
Existing Event of Default and the Excluded Defaults.
(c) The
Obligated Parties shall have delivered to the Agent an executed original of this
Amendment;
(d) The
Obligated Parties shall have paid to the Agent all costs and expenses owed to
and/or incurred by the Agent arising in connection with this Amendment;
and
(e) All
proceedings taken in connection with the transactions contemplated by this
Amendment and all documentation and other legal matters incident thereto shall
be satisfactory to the Agent in its sole and absolute discretion.
ARTICLE
V
MISCELLANEOUS
Section 5.1 Loan Documents
Unmodified. Except as otherwise specifically modified by this
Amendment, all terms and provisions of the Loan Agreement and all other Loan
Documents, as modified hereby, shall remain in full force and
effect. Nothing contained in this Amendment shall in any way impair
the validity or enforceability of the Loan Documents, as modified hereby, or
alter, waive, annul, vary, affect, or impair any provisions, conditions, or
covenants contained therein or any rights, powers, or remedies granted therein,
except as otherwise specifically provided in this Amendment. Subject
to the terms of this Amendment, any Lien and/or security interest granted to the
Lenders in the Collateral set forth in the Loan Documents shall remain unchanged
and in full force and effect and the Loan Agreement and the other Loan Documents
shall continue to secure the payment and performance of all of the
Obligations. The parties hereto agree to be bound by the terms and
conditions of the Loan Agreement and other Loan Documents as amended by this
Amendment, as though such terms and conditions were set forth
herein. Each reference in the Loan Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein” or words of similar import shall mean and be a
reference to the Loan Agreement as amended by this Amendment, and each reference
herein or in any other Loan Document to the “Loan Agreement” or “Agreement”
shall mean and be a reference to the Loan Agreement as amended and modified by
this Amendment.
Section 5.2 Parties, Successors and
Assigns. This Amendment shall be binding upon and shall inure to the
benefit of the Obligated Parties, the Lenders, the Agent, and their respective
successors and permitted assigns.
Section 5.3 Counterparts. This
Amendment may be executed in counterparts, each of which taken together shall
constitute one instrument. This Amendment may be executed and
delivered by facsimile or electronic mail, and shall have the same force and
effect as manually signed originals. The Agent may require
confirmation by a manually-signed original, but failure to request or deliver
same shall not limit the effectiveness of any facsimile or electronically
delivered signature.
Section 5.4 Headings. The
headings, captions, and arrangements used in this Amendment are for convenience
only, are not a part of this Amendment, and shall not affect the interpretation
hereof.
Section 5.5 Expenses of the Lenders and the
Agent. Without limiting the terms and conditions of the Loan
Documents, the Obligated Parties agree to pay on demand: (a) all
costs and expenses incurred by the Lenders and the Agent in connection with the
preparation, negotiation, and execution of this Amendment and the other Loan
Documents executed pursuant hereto and any and all subsequent amendments,
modifications, and supplements hereto or thereto, including without limitation,
the costs and fees of the Lenders’ or the Agent’s legal counsel; and (b) all
costs and expenses reasonably incurred by the Lenders or the Agent in connection
with the enforcement or preservation of any rights under the Loan Agreement,
this Amendment, and/or the other Loan Documents, including without limitation,
the costs and fees of the Lenders’ or Agent’s legal counsel and the costs and
fees associated with any environmental due diligence conducted in relation
hereto.
Section 5.6 Choice of Law; Jury Trial
Waiver; Etc. This
Amendment 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). To the fullest 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 Amendment. Without limiting the applicability of any
other provision of this Amendment, the terms of Sections 14.15 and
14.16 of the
Loan Agreement shall apply to this Amendment.
Section 5.7 Total Agreement. This
Amendment, the Loan Agreement, and all other Loan Documents embody the entire
understanding of the parties with respect to the subject matter thereof and
supersede all prior understandings regarding the same subject
matter.
[Remainder
of page intentionally left blank; signature page follows]
IN WITNESS WHEREOF, the parties have
executed and delivered this Amendment as of the day and year first written
above.
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SPORT
CHALET, INC.,
a
Delaware corporation
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
| Title: | EVP & CFO | ||
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SPORT
CHALET VALUE SERVICES, LLC,
a
Virginia limited liability company
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
| Title: | Manager | ||
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BANK
OF AMERICA, N.A.
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | ||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇ | ||
| Title: | SVP | ||