1
March 5, 1998
Mr. Xxxx Xxxxxxx
President
The Sports Club Company
00000 Xxxxx Xxxxxx Xxxx.
Suite 300
Los Angeles, CA 90025
Re: AT&T Commercial Finance Corporation Loan to LA/Irvine Sports
Clubs, Ltd. (the "Loan")
Dear Xxxx:
Per your letter request of February 25, 1998, and notwithstanding the
provisions of Section 2.04 of the Loan Agreement ("Loan Agreement") made as of
March 9, 1996 by and between AT&T Commercial Finance Corporation ("AT&T CFC")
and L.A./Irvine Sports Clubs, Ltd. ("Borrower") prohibiting prepayment of the
above-referenced Loan, AT&T CFC agrees as follows:
AT&T CFC will accept a prepayment of the Loan in full during the period
from January 15, 1998 to April 30, 1998, subject to the following conditions:
1. AT&T CFC's receipt of a least 10 days prior written notice of
Xxxxxxxx's intent to repay the Loan in its entirety, including
all principal, interest, late fees and any other Loan
obligations. Such notice shall specify expected date of
prepayment so that AT&T CFC may prepare a payoff letter for the
Loan; and
2. AT&T CFC's receipt of a Prepayment Premium equal to the greater
of (i) $2,800,000 or (ii) $2,800,000 plus any additional breakage
cost for any decrease in interest rates between March 31, 1998
and the prepayment date which shall in no event be later than
April 30, 1998 (interest rate set two business days prior to the
prepayment date) at the time of payment of all other amounts then
outstanding
2
Mr. Xxxx Xxxxxxx
March 5, 1998
Page 2
under the Loan.
Borrower shall prepare and deliver to AT&T CFC at Borrower's expense
such releases of all liens or interests held by AT&T CFC in connection with the
Loan as Borrower deems appropriate. AT&T CFC will execute and forward such
releases per Xxxxxxxx's direction upon its receipt of the Prepayment Premium
specified above and all other amounts outstanding under the Loan.
The limited waiver by AT&T CFC of the prohibition against full
prepayment during the time period and subject to the conditions described above
and this letter shall not:
a. operate as a waiver of any right, power or remedy of the
Lender under the Loan Documents;
b. operate as a waiver of any provision of the Loan
Documents except as specifically set forth herein;
c. be deemed a waiver of any other subsequent or different
prepayment term or other term or condition with such
provision or any other provision of the Loan Agreement;
nor
d. be deemed a course of dealing with respect to any such
limited waiver.
Terms defined in the Loan Agreement which are used herein shall have the
same meaning set forth in the Loan Agreement unless otherwise specified herein.
Please confirm your acceptance of the terms of this limited offer of
early prepayment rights by signing and returning one original of this letter to
my attention by no later than March 13, 1998. We will understand your failure to
timely sign and return this letter to be a rejection of the offer contained
herein.
If you have any questions, please do not hesitate to call me.
Sincerely,
3
Mr. Xxxx Xxxxxxx
March 5, 1998
Page 3
/s/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
THE ABOVE TERMS ARE ACCEPTED BY:
LA/Irvine Sports Clubs, Ltd.
By: Sports Club, Inc. of California
Its: General Partner
By:/s/ XXXX X. XXXXXXX
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Its: President
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cc: Xxx Xxxxxxx
