Amendment No. 4 Business Loan Agreement



 


Exhibit 10.55


AMENDMENT NO. 4 TO BUSINESS LOAN AGREEMENT


     This Amendment No. 4 to Business Loan Agreement (this “Amendment”) is
entered into as of June 10, 2002, between Bank of America, N.A. (“Bank”) and
Sport Chalet, Inc. (the “Borrower”).


RECITALS


     A. The Bank and the Borrower entered into a certain Business Loan
Agreement dated as of June 19, 1998, as previously amended (the “Agreement”).


     B. The Bank and the Borrower now desire to amend the Agreement on the
terms and conditions set forth below.


AGREEMENT


     1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meanings ascribed to them in the Agreement.


     2. Amendments. The Agreement is hereby amended as follows:



	       	2.1	  	Paragraph 2.1(a) of the Agreement is amended by
inserting the following at the end before the period:
	 
	       	 	  	“provided, however, that the Commitment shall be Thirty
Million Dollars ($30,000,000) during the period of October 1,
2002 through and including December 31, 2002.”
	 
	       	2.2	  	Paragraph 2.1(c) of the Agreement is amended by
inserting the following at the end before the period:
	 
	       	 	  	“provided, however, that the outstanding principal balance of
advances under the line of credit plus the outstanding
amounts of any letters of credit, including amounts drawn on
letters of credit and not yet reimbursed, shall not exceed at
any time the lesser of (i) 45% of the Borrower’s net
inventory at cost (which will be determined utilizing the
first-in-first-out (FIFO) method, based upon the retail
method of accounting and utilizing the Borrower’s cost) and
(ii) the Commitment. The Borrower shall from time to time
prepay advances to the extent necessary to comply with the
foregoing limitation.”
	 
	       	2.3	  	Paragraph 2.2 of the Agreement is amended by
substituting “September 30, 2003” for “August 31, 2002”.
	 
	       	2.4	  	Paragraph 2.3 (a) of the Agreement is amended by
substituting “Bank’s Prime Rate plus .25 percentage points”
for “Bank’s Prime Rate”.
	 
	       	2.5	  	Paragraph 2.9(i) of the Agreement is amended by
deleting “the Expiration Date” and substituting “January 31,
2004” in lieu thereof.
	 
	       	2.6	  	Paragraph 2.9(ii) of the Agreement is amended by
deleting “the Expiration Date” and substituting “September 30,
2004” in lieu thereof.



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	       	2.7	  	Paragraph 3.1 of the Agreement is amended by
substituting “.20% per year” for “.125% per year”.
	 
	       	2.8	  	Paragraph 3.3 of the Agreement is amended by
substituting “Seven Thousand Dollars ($7,000)” for “Three
Thousand Dollars ($3,000)”.
	 
	       	2.9	  	Paragraph 8.5 of the Agreement is amended and
restated in its entirety as follows:
	 
	       	 	  	“8.5 Fixed charge Coverage Ratio. To maintain a Fixed Charge
Coverage ratio of at least 1.00:1.0.
	 
	       	 	  	"'Fixed Charge Coverage Ratio” is defined as the sum of net
profit after taxes, tax expense, interest expense,
depreciation, amortization, and rent expense, less dividends,
loans and advances to parents, affiliates and officers, and
cash taxes paid divided by the sum of current portion of long
term debt, rent expense, interest expense, and non-financed
capital expenditures; provided, however, that for purposes of
calculating this ratio (a) for the periods ending March 31,
2002, June 30, 2002 and September 30, 2002, only non-financed
capital expenditures in excess of $6,000,000 in the preceding
4 fiscal quarter period shall be included and (b) for the
period ending December 31, 2002, only non-financed capital
expenditures in excess of $4,000,000 in the preceding 4
fiscal quarter period shall be included; provided, further,
that for purposes of calculating this ratio for the period
ending March 31, 2003 and thereafter, 100% of non-financed
capital expenditures in the preceding 4 fiscal quarter period
shall be included.
	 
	       	 	  	This ratio will be calculated at the end of each fiscal
quarter, using the results of that quarter and each of the 3
immediately preceding quarters. The current portion of long
term debt will be measured as of the last day of the
preceding fiscal year.
	 
	       	2.10	  	Paragraph 8.9 of the Agreement is amended and
restated in its entirety as follows:
	 
	       	 	  	"8.9 Capital Expenditures. Not to spend or incur obligations
to acquire fixed or capital assets for more than (a) Twelve
Million Two Hundred Fifty Thousand Dollars ($12,250,000) for
the 12 months ending March 31, 2002 and (b) Fourteen Million
Five Hundred Thousand Dollars ($14,500,000) in any single
fiscal year thereafter.”
	 
	       	2.11	  	Except as hereby amended, all of the terms and
conditions of the Agreement shall remain in full force and
effect.



     3. Conditions. This Amendment shall not be effective until Bank has
received the following, in form and substance acceptable to Bank:



	       	(a)	  	This Amendment, duly executed;
	 
	       	(b)	  	Evidence that the execution, delivery and
performance by the Borrower of this Amendment has been duly
authorized.
	 
	       	(c)	  	A fee in the amount of Twenty Thousand Dollars
($20,000).



     4. Representations and Warranties. When the Borrower signs this
Amendment, the Borrower represents and warrants to the Bank that: (a) there is
no event which is, or with notice or lapse of time or both would be, a default
under the Agreement, (b) the representations and warranties in the


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Agreement are true as of the date of this Amendment as if made on the date
hereof, (c) this Amendment is within Borrower’s powers, has been duly
authorized, and does not conflict with Borrower’s organizational papers, and
(d) this Amendment does not conflict with any law, agreement, or obligation by
which Borrower is bound.


     5. Effect of this Amendment. Except as provided in this Amendment, all of
the terms and conditions of the Agreement shall remain full force and effect.


     This Amendment is executed as of the date stated at the beginning of this
Amendment.



	 	 	 
	BANK OF AMERICA, N.A	 	
SPORT CHALET, INC.
	 
	By: /s/ JEFFREY THOM



Jeffrey A. Thom, Vice President	 	
By:   /s/ HOWARD KAMINSKY



Howard Kaminsky,

Chief Financial Officer



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