EXHIBIT 10.7
SIXTH AMENDMENT AND WAIVER TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS SIXTH AMENDMENT AND WAIVER, dated as of February 21, 1997
(this "Amendment"), to the Third Amended and Restated Credit Agreement, dated as
of June 26, 1995, as in effect immediately prior to the date hereof (the "Credit
Agreement"), among BALLY TOTAL FITNESS HOLDING CORPORATION (formerly known as
Bally's Health & Tennis Corporation), a Delaware corporation (the "Borrower"),
the several banks and other financial institutions (the "Banks") parties thereto
and THE CHASE MANHATTAN BANK (formerly known as Chemical Bank), a New York
banking corporation, as agent (in such capacity, the "Agent") for the Banks.
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Agent and the Banks to
agree to amend and waive certain provisions of the Credit Agreement as set forth
in this Amendment; and
WHEREAS, the Agent and the Banks are willing to agree to such
amendments and waivers, but only on the terms and subject to the conditions set
forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein,
terms defined in the Credit Agreement are used herein as therein
defined.
2. Amendments to Section 1.01. Section 1.01 of the
Credit Agreement is hereby amended by:
(a) adding the following definition:
"GAAP EBITDA" means with respect to the Borrower and
its Subsidiaries on a consolidated basis, without duplication,
for any period of determination, (i) Consolidated Net Income
(loss), plus, to the extent deducted in determining
Consolidated Net Income (loss), (ii) provision for taxes,
(iii) Consolidated Net Interest, and (iv) depreciation and
amortization;
(b) changing subparagraph (b) of the definition
of "Revolving Credit Commitment Amount" by deleting
"$15,000,000" therein and inserting in lieu thereof
"$20,000,000"; and
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(c) changing subparagraph (c) of the definition of
"Termination Date" by deleting "1997" therein and substituting
in lieu thereof "1998".
3. Amendment to Subsection 6.01. Subsection 6.01 of the Credit
Agreement is hereby amended by deleting the dollar amount "$90,000,000" and
substituting therefor the dollar amount "$80,000,000".
4. Waiver and Amendment to Subsection 6.13. The Banks hereby
waive the requirements of Section 6.13 of the Credit Agreement for the period of
four consecutive fiscal quarters ended December 31, 1996 and Section 6.13 is
hereby amended by deleting Section 6.13 in its entirety and substituting in lieu
thereof the following:
6.13 Interest Coverage. Maintain a ratio of (i) Cash
EBITDA to (ii) Cash Interest Expense, for any period of four
consecutive fiscal quarters of the Borrower commencing with
such period ended March 31, 1997 equal to or greater than 1.15
to 1.0; provided, that, for the purpose of calculating the
ratio under this Section 6.13, Cash Interest Expenses shall
not include any amounts paid or payable constituting interest
on the Receivables Program Certificates ("Receivable Program
Interest") and Cash EBITDA shall be reduced by such
Receivables Program Interest.
5. Amendment to Article VI. Article VI of the Credit
Agreement is hereby amended by inserting at the end thereof the
following Section 6.18:
6.18 GAAP EBITDA Interest Coverage. Maintain a ratio
of (i) GAAP EBITDA to (ii) Cash Interest Expense for any
period of four consecutive fiscal quarters of the Borrower
equal to or greater than (a) 1.25 to 1.00 for all such periods
ended March 31, 1997 to and including December 30, 1997, (b)
1.50 to 1.0 for such periods ended December 31, 1997 to and
including March 30, 1998 and (c) 1.70 to 1.00 for all such
periods ended thereafter.
6. Representations and Warranties. The Borrower hereby
confirms that, after giving effect to the amendments and waivers provided for
herein, (i) the representations and warranties contained in Article V of the
Credit Agreement are true and correct in all material respects on and as of the
date hereof and no Default or Event of Default has occurred and is continuing,
and (ii) the Borrower has all necessary power and has taken all corporate action
necessary to approve and authorize this Amendment.
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7. No Other Amendments. Except as expressly amended
or waived hereby, the Credit Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its
terms.
8. Counterparts. This Amendment may be executed by the
parties hereto in any number of separate counterparts and all of
such counterparts taken together shall be deemed to constitute
one and the same instrument.
9. Conditions of Effectiveness. This Amendment shall
be come effective on the date on which all of the following
conditions have been met:
(a) The Borrower and each Bank shall have executed a
counterpart of this Amendment and the Agent shall have
received confirmation of such execution.
(b) The Guarantor's Consent in the form of Exhibit A
attached hereto shall have been executed on behalf of each
Guarantor, and Agent shall have received confirmation of such
execution.
(c) The Agent shall have received evidence, in form
and substance satisfactory to it, of Borrower's corporate
action authorizing the execution and delivery of this
Amendment.
(d) The Agent shall have received (i) for each Bank
an amendment fee equal to 0.5% of each Bank's Commitment and
(ii) all other fees payable by the Borrower to the Agent or
any Bank on or prior to the effectiveness of this Amendment.
10. Extension Fee. In the event that all amounts owed under
the Credit Agreement and the other Credit Documents have not been repaid in
full, all Letters of Credit have not been terminated and returned to the Issuing
Bank, and the Commitments have not been terminated, on or before July 1, 1997,
then the Borrower shall, on July 1, 1997, pay to the Agent, for the account of
each Bank, an extension fee equal to 0.5% of each Bank's Commitment
(disregarding, for this purpose, any Default or Event of Default that may then
exist) existing on July 1, 1997.
11. Governing Law. THIS AMENDMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF ILLINOIS.
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12. Costs and Expenses. Borrower agrees to pay on
demand:
(a) to Agent all reasonable costs, expenses and
attorneys' fees (including allocated costs for in-house legal
services) incurred in connection with the preparation and
administration of this Amendment and any instrument or
agreement required hereunder;
(b) to Agent and to each Bank all reasonable costs,
expenses and attorney's fees (including allocated costs for
in-house legal services) incurred by Agent and each such Bank
in connection with the enforcement of this Amendment or any
instrument or agreement required hereunder; and
(c) to Agent and to each Bank all stamp, registration
and other duties and imposts to which this Amendment and any
instrument or agreement required hereunder may be subject.
Borrower shall indemnify Agent and each Bank against any and
all liabilities and penalties resulting from any delay in
paying, or failure to pay, any such duties and imposts.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BALLY TOTAL FITNESS HOLDING
CORPORATION
By: /s/ Xxxx X. Xxxxx
Title: Sr. VP, CFO & Treasurer
THE CHASE MANHATTAN BANK, as Agent
By: /s/ Xxx Xxxxxxxxx
Title: Managing Director
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THE CHASE MANHATTAN BANK,
Individually
By: /s/ Xxx Xxxxxxxxx
Title: Managing Director
FIRST UNION NATIONAL BANK
(formerly known as First
Fidelity Bank, N.A.)
By: /s/ Xxxxxx X. Xxxxxx,Xx.
Title: Senior Vice President
FIRST BANK NATIONAL ASSOCIATION
By: /s/
Title: VP
LASALLE NATIONAL BANK
By: /s/
Title: Vice President
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Exhibit A
Form of Guarantors' Consent
as of February 21, 1997
The Chase Manhattan Bank Individually and as Agent
First Union National Bank
First Bank National Association
LaSalle National Bank
Gentlemen:
Reference is made to the Third Amended and Restated Credit
Agreement dated as of June 26, 1995 (the "Credit Agreement"), as previously
amended, among you and Bally Total Fitness Holding Corporation (formerly known
as Bally's Health & Tennis Corporation) and to the Amended and Restated Guaranty
Agreement and the New Guarantors Guaranty Agreement executed May 15, 1991, as
amended (collectively, the "Guaranty Agreements"), and the other Collateral
Documents executed by the undersigned in connection with the Credit Agreement.
Each of the undersigned hereby consents to the execution of
the attached Sixth Amendment and Waiver to Third Amended and Restated Credit
Agreement dated as of February 21, 1997, and acknowledges receipt of a copy
thereof. Each of the undersigned hereby jointly and severally, unconditionally
and irrevocably agrees that the Guaranty Agreements and other Collateral
Documents to which it is a party shall apply to the Credit Agreement as amended,
affected, or modified by said Sixth Amendment and Waiver to Third Amended and
Restated Credit Agreement.
It is hereby agreed that all of the terms and conditions of
the Guaranty Agreements and such other Collateral Documents shall continue in
full force and effect and that references in the Guaranty Agreements and such
other Collateral Documents to the Credit Agreement shall be deemed to mean the
Credit Agreement, as amended, affected or modified by the said Sixth Amendment
and Waiver to Third Amended and Restated Credit Agreement.
BALLY'S FITNESS AND RACQUET CLUBS, INC.
BALLY FITNESS FRANCHISING, INC.
BALLY FRANCHISE RSC, INC.
BALLY FRANCHISING HOLDINGS, INC.
BALLY'S PACWEST, INC.
BALLY'S S.C. MANAGEMENT, INC.
BALLY TOTAL FITNESS CORPORATION
CONNECTICUT COAST FITNESS CENTERS, INC.
CONNECTICUT VALLEY FITNESS CENTERS, INC.
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GREATER PHILLY XX. 0 XXXXXXX XXXXXXX
XXXXXXX XXXXXX XX. 0 HOLDING COMPANY
HEALTH & TENNIS CORPORATION OF NEW YORK
HOLIDAY HEALTH & FITNESS CENTERS OF
NEW YORK INC.
HOLIDAY HEALTH CLUBS AND FITNESS
CENTERS, INC.
HOLIDAY HEALTH CLUBS OF THE EAST COAST, INC.
HOLIDAY HEALTH CLUBS OF THE SOUTHEAST, INC.
HOLIDAY/SOUTHEAST HOLDING CORP.
HOLIDAY SPA HEALTH CLUBS OF CALIFORNIA
HOLIDAY UNIVERSAL, INC.
HOUSTON HEALTH CLUBS, INC.
XXXX XXXXXXX FITNESS CENTERS, INC.
XXXX XXXXXXX HOLDING CORP.
MANHATTAN SPORTS CLUB, INC.
NEW FITNESS HOLDING CO., INC.
NYCON HOLDING CO., INC.
PHYSICAL FITNESS CENTERS OF PHILADELPHIA, INC.
PROVIDENCE FITNESS CENTERS, INC.
RHODE ISLAND HOLDING COMPANY
SCANDINAVIAN DEVELOPMENT COMPANY
SCANDINAVIAN HEALTH SPA, INC.
SCANDINAVIAN US SWIM & FITNESS, INC.
SO. CAL. NAUTILUS FITNESS CENTERS, INC.
TIDELANDS HOLIDAY HEALTH CLUBS, INC.
U.S. HEALTH, INC.
VERTICAL FITNESS AND RACQUET CLUB, LTD.
XXX XXXXX INTERNATIONAL, INC.
XXX XXXXX INTERNATIONAL OF CLEVELAND, INC.
XXX XXXXX INTERNATIONAL OF MISSOURI, INC.
XXX XXXXX INTERNATIONAL OF TOLEDO, INC.
XXX XXXXX OF GREATER MICHIGAN, INC.
By: /s/ Xxxx X. Xxxxx
Title: Senior VP, CFO & Treasurer
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PENN HILLS SPA LIMITED PARTNERSHIP
SPA ASSOCIATES LIMITED PARTNERSHIP
By: BALLY TOTAL FITNESS HOLDING
CORPORATION as General Partner
By: /s/ Xxxx X. Xxxxx
Title: Senior VP, CFO & Treasurer
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