EXHIBIT 10.14
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment"), dated as
of December 23, 1998 (but effective as of May 27, 1998), is entered into among
CLUBCORP INTERNATIONAL, INC., a Delaware corporation (the "Borrower"),
successor by merger to Club Corporation International, a Nevada corporation
("Old ClubCorp"), the banks listed on the signature page hereof (the "Lenders"),
and NATIONSBANK N.A., in its capacity as administrative agent for the Lender
(the "Administrative Agent").
A. The Borrower, the Lender, certain co-agents, and the Administrative
Agent are parties to that certain Credit Agreement, dated as of May 27, 1998
(the "Credit Agreement"; the terms defined in the Credit Agreement and not
otherwise defined herein shall be used herein as defined in the Credit
Agreement).
B. As a result of a mandate by the Securities and Exchange Commission with
respect to the accounting of Membership Deposits, the parties hereto agree to
amend the Credit Agreement to provide certain revisions thereto to reflect the
change in accounting for Membership Deposits as a result of such mandate, which
revisions were contemplated by the parties in the last sentence of Section 1.3
of the Credit Agreement.
C. Old ClubCorp has merged into the Borrower pursuant to the Agreement and
Plan of Merger and Reincorporation effective as of August 12, 1998, with the
Borrower being the surviving corporation (the "Merger"). By operation of Law,
upon the Merger the Borrower assumed all of the obligations and liabilities of
Old ClubCorp under the Loan Documents. Upon the express assumption by the
Borrower of all obligations and liabilities of Old ClubCorp as provided herein,
the Lenders shall consent to and approve the Merger.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the parties
hereto covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) The definition of "EBITDA" set forth in Section 1.1 of the Credit
Agreement is hereby amended to read as follows:
"EBITDA" means, for any period, determined in accordance with GAAP on
a consolidated basis for the Borrower and its Subsidiaries, the sum of (a)
Pretax Net Income (excluding therefrom, to the extent included in determining
Pretax Net Income, any items of extraordinary gain, including net gains on the
sale of assets other than asset sales in the ordinary course of business, and
adding thereto, to the extent included in determining Pretax Net Income, any
items of extraordinary loss, including net losses on the sale of assets other
than asset sales in the ordinary course of business), plus (b) depreciation and
amortization, plus (c) interest expense (including but not limited to interest
expense pursuant to Capitalized Lease Obligations), plus (d) to the extent
included in determining Pretax Net Income, non-recurring, non-cash charges,
minus (e) to the extent included in determining Pretax Net Income, Non-recurring
credits, plus (f) to the extent included in determining Pretax Net Income, Net
Change in Deferred Membership Revenue."
(b) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Net Change in Deferred Membership Revenue" thereto in proper
alphabetical order to read as follows:
"Net Change in Deferred Membership Revenue" means, for any period, the
net change during such period in current and non-current deferred membership
revenue and related expenses in respect of Membership Deposits."
(c) Section 7.4(f) of the Credit Agreement is hereby amended to read as
follows:
"(f) Investments in Non-Guarantors (calculated on the initial
investment amount but adjusted to take into account any proceeds received by the
Borrower or any other Obligor on a liquidation or repayment of any such
Investments) not to exceed, together with other Investments pursuant to Section
7.4(g) hereof (calculated as provided in Section 7.4(g) hereof) and Acquisitions
of Non-Guarantors pursuant to Section 7.8 hereof (calculated using the aggregate
Acquisition Consideration therefor), an amount equal to the sum of (i)
$7,000,000 plus (ii) 10% of Net Worth at any time; and"
(d) Section 7.4(g) of the Credit Agreement is hereby amended to read as
follows:
"(g) Investments not otherwise permitted pursuant to clauses (a)
through (e) above (calculated on the initial investment amount but adjusted to
take into account any proceeds received by the Borrower or any other Obligor on
a liquidation or repayment of any such Investments) not to exceed, together with
Investments in (calculated as provided in Section 7.4(f) hereof) and
Acquisitions of Non-Guarantors pursuant to Section 7.8 hereof (calculated using
the aggregate Acquisition Consideration therefor), an amount equal to the sum of
(i) $7,000,000 plus (ii) 10% of Net Worth at any time;"
(e) Clause (e) of Section 7.8 of the Credit Agreement is hereby amended to
read as follows:
"and (e) the aggregate Acquisition Consideration for all Non-Guarantors,
together with Investments in Non-Guarantors (calculated as provided in Section
7.4(f) hereof) and other Investments (calculated as provided in Section 7.4(g)
hereof) pursuant to Section 7.4(g) hereof, shall not exceed an amount equal to
the sum of (i) $7,000,000 plus (ii) 10% of Net Worth at any time."
(f) Section 7.14 of the Credit Agreement is hereby amended to read as
follows:
"Section 7.14 Minimum Tangible Net Worth. The Borrower shall not
permit the Tangible Net Worth at any time to be less than the sum of (a)
$305,060,000, plus (b) 50% of cumulative Net Income for the period from, but not
including, December 31, 1997 through the date of calculation (but excluding from
the calculation of such cumulative Net Income the effect, if any, of any Fiscal
Quarter (or portion of a Fiscal Quarter not then ended) of the Borrower for
which Net Income was a negative number), plus (c) an amount equal to 100% of the
tangible net worth of any Person that becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any subsidiary of the Borrower
or substantially all of the assets of which are acquired by the Borrower or any
Subsidiary of the Borrower to the extent the purchase price paid therefor is
paid in equity securities of the Borrower or any Subsidiary of the Borrower,
plus (d) 75% of the Net Cash Proceeds (but without duplication) of any offerings
of capital stock or other equity interests of the Borrower or any of its
Subsidiaries."
(g) The Compliance Certificate is hereby amended to be in the form of
Exhibit B to this First Amendment.
2. ASSUMPTION. The Borrower hereby irrevocably and unconditionally (a)
accepts and assumes each and all obligations and liabilities of Old ClubCorp
pursuant to the Credit Agreement, the Notes and all other Loan Documents and (b)
agrees that it will perform in accordance with their respective terms all
the obligations, agreements and covenants which by the terms of the Credit
Agreement, the Notes and each other Loan Document are required to be performed
by Old ClubCorp, as though it were a signatory to each such Loan Document. The
parties agree that all references to the Borrower in the Loan Documents refer to
ClubCorp International, Inc., a Delaware corporation.
3. CONSENT AND APPROVAL. Subject to the conditions of effectiveness set
forth in Section 5 of this First Amendment, the Lenders hereby consent to and
approve the Merger.
4. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Borrower represents and warrants that, as of
the date hereof and after giving effect to the amendments provided in the
foregoing Section 1 and the consent and approval provided in the foregoing
Section 3:
(a) the representations and warranties contained in the Credit
Agreement are true and correct on and as of the date hereof as if made on and as
of such date;
(b) no event has occurred and is continuing which constitutes a
Default or an Event of Default;
(c) the Borrower has full power and authority to execute, deliver
and perform this First Amendment, and the Credit Agreement, as amended by this
First Amendment, the execution, delivery and performance of this First
Amendment, and the Credit Agreement as amended by this First Amendment, have
been duly authorized by all corporate action of the Borrower, and this First,
Amendment and the Credit Agreement, as amended hereby, constitute the legal,
valid and binding obligations of the Borrower, enforceable in accordance
with their respective terms, except as enforceability may be limited by
applicable Debtor Relief Laws and by general principles of equity ( regardless
of whether enforcement is sought in a proceeding in equity or at law) and
except as rights to indemnity may be limited by federal or state securities
laws;
(d) neither the execution, delivery and performance of the First,
Amendment or the Credit Agreement, as amended by this First Amendment, nor the
consummation of any transactions herein or therein, will contravene or conflict
with any Law to which the Borrower is subject or any indenture, agreement or
other instrument to which the Borrower or any of its property is subject; and
(e) no authorization, approval, consent or other action by, notice to,
or filing with, any governmental authority or other Person, including the Board
of Directors of the Borrower, is required for the (i) execution, delivery or
performance by the Borrower of this First Amendment, and the Credit Agreement,
as amended by this First Amendment, or (ii) acknowledgement of this First
Amendment by any Guarantor.
5. CONDTIONS OF EFFECTIVENESS. This First Amendment shall be effective
as of May 27, 1998, subject to the following:
(a) the representations and warranties set forth in Section 4 of this
First Amendment shall be true and correct;
(b) the Administrative Agent shall have received counterparts of this
First Amendment executed by the Determining Lenders;
(c) the Administrative Agent shall have received counterparts of this
First Amendment executed by the Borrower and acknowledged by each
Guarantor;
(d) the Administrative Agent shall have received certified resolutions
of the Board of Directors of the Borrower authorizing (i) the execution,
delivery and performance of this First Amendment, and (ii) the performance of
the Credit Agreement, as amended by this First Amendment, and the other Loan
Documents; and
(e) the Administrative Agent shall have received in form and substance
satisfactory to Administrative Agent, such other documents, certificates and
instruments as Lender shall require.
6. GUARANTOR'S ACKNOWLEDGEMENT. By signing below, each Guarantor (i)
acknowledges, consents and agrees to the execution, delivery and performance by
the Borrower of this First Amendment, (ii) acknowledges and agrees that its
obligations in respect of its Subsidiary Guaranty are not released, diminished,
waived, modified, impaired or affected in any manner by this First Amendment,
any of the provisions contemplated herein or the Merger, (iii) ratifies and
confirms its obligations under its Subsidiary Guaranty, and (iv) acknowledges
and agrees that it has no claim or offsets against, or defenses or counterclaims
to, its Subsidiary Guaranty.
7. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of the First Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", or words of like import
shall mean and be a reference to the Credit Agreement, as amended by this
First Amendment.
(b) The Credit Agreement, as amended by this First Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
8. COSTS, EXPENSES AND TAXES. The Borrower shall be obligated to pay the
costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this First Amendment and
the other instruments and documents to be delivered hereunder.
9. EXECUTION IN COUNTERPARTS. This First Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an
original and all of which when taken together shall constitute but one and the
same instrument.
10. GOVERNING LAW; BINDING EFFECT. This First Amendment shall be
governed by and construed in accordance with the laws of the State of Texas
(without giving effect to conflict of laws) and the United States of America,
and shall be binding upon the Borrower and each Lender and their respective
successors and assigns.
11. HEADINGS. Section headings in this First Amendment are included herein
for convenience of reference only and shall not constitute a part of this First
Amendment for any other purpose.
12. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIRST
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date first above written.
CLUBCORP INTERNATIONAL, INC.
By: /s/Xxxx X. Xxxxxx III
Name: Xxxx X. Xxxxxx III
Title: Treasurer
NATIONSBANK, N.A., as Administrative Agent and
as a Lender, Swing Line Bank and Issuing Bank
By: /s/Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH, as
Co-Agent and as a Lender
By: /s/Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Senior Vice President
FIRST UNION NATIONAL BANK, as Co-Agent
and as a Lender
By: /s/Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
BANK ONE, TEXAS N.A.
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
SOUTHTRUST BANK, N.A.
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
XXXXX FARGO BANK (TEXAS), N.A.
By: /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
BRANCH BANKING AND TRUST COMPANY
By: /s/Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Vice President
COMERICA BANK
By: /s/Xxxxxxxx X. Xxxxxxxxx, III
Name: Xxxxxxxx X. Xxxxxxxxx, III
Title: Vice President
DEPOSIT GUARANTY NATIONAL BANK
By: /s/Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Senior Vice President
HIBERNIA NATIONAL BANK
By: /s/Xxxxxxxxxxx Xxxxx
Name: Xxxxxxxxxxx Xxxxx
Title: Vice President
MELLON BANK, N.A.
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
LTCB TRUST COMPANY
By: /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Head of Southwest Region
